It should work if you build a kernel without xennet devices.
  Because of the way Xen works, network and block devices are created after
  the kernel is started, so we have to wait for them to show up to make sure
  that the system will start properly. Currently the code waits for one
  block device and one network device.

Probably a xen issue really, but this seems unclean, and it would be
better to wait until the hypervisor indicates 'setup complete' and
then find out which devices are there.

-- 
        Greg Troxel <gdt@ir.bbn.com>