Sorry in advance that I only have time to report the problem. If no one beats me to it I'll look into it a little more on Monday.
Something goes wrong when lzma is enabled (which it is by default)
I'm attaching my config which succeeds (nolzma.config), and the serial output from qemu using lzma and not. For some reason, segment0 gets found twice when lzma is used? Anyway, it doesn't find the devices it should and dies.
Thanks, Myles