While trying to create an image ("harddisk") for Linux domU I got the
dom0 in some weird state: I'm able to ping it but _nothing_ else works.
I can login from the console (type root and the password) but I don't
get the shell prompt.

This is what I did:

dd if=/dev/zero of=/tmp/linux bs=1024k count=4096
vnconfig vnd0 /tmp/linux
fdisk -i /dev/vnd0d
fdisk -u /dev/vnd0d

0: Linux native (sysid 131)
     start 63, size 8128827 (3969 MB, Cyls 0-506)
1: Linux swap or Prime or Solaris (sysid 130)
     start 8128890, size 259718 (127 MB, Cyls 506-522/42/33)
2: <UNUSED>
3: <UNUSED>

disklabel /dev/vnd0d

  e:   8128827        63 Linux Ext2      0     0
  f:    259718   8128890       swap

mkfs.ext3 /dev/vnd0e
<hangs here in the middle of mkfs>