Comment 19 for bug 470636

You are indeed correct that specifying the format of the disk image file corrected the issue. However, this is also a fairly large regression over previous functionality. Configurations that worked flawlessly under lucid will now break under maverick. Additionally, the reason for the breakage will not be clear. There aren't any error messages reported, at least none that I could find, that would guide the user to what the problem actually is.