I had a similar problem, but the cause turned out to be different for
me.

I had changed the GID of group tty from 5 to 11. I later found out that
this contravenes the Ubuntu standard GID policy.

The symptom was similar to the above
chardev: opening backend "pty" failed: Exec format error

It turns out that "Exec format error" is the string given by
errno=ENOEXEC.

After some investigation of my problem, it turns out that (in my case) the 
failure was occurring at
qemu-char.c:997     if (openpty(&master_fd, &slave_fd, pty_name, NULL, NULL) < 
0) {

The call to openpty was failing because the directory /dev/pts had a gid of 11 
instead of a gid of 5.
The error was issued because the directory /dev/pts did not have the 
appropriate exec permission to be able to create a new device file within it.

I changed around my GIDs to match the standard values, and that was
enough to fix the problem (for me).

Note that /dev/pts is a MOUNTED filesystem of type devpts. The gid of the mount 
can be found by typing mount.
In my case, kvm fails when set as follows
devpts on /dev/pts type devpts (rw,noexec,nosuid,gid=11,mode=0620)
GOOD: kvm works:
devpts on /dev/pts type devpts (rw,noexec,nosuid,gid=5,mode=0620)

I acknowledge that this problem is a bit different from the subject of
this bug, but this is the closest bug I found to my problem when I
initially came across it.

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https://bugs.launchpad.net/bugs/632696

Title:
  libvirt won't start a VM with serial or console

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