Jamin,
  I suspect this is related to apparmour profile for libvirt.  Do you see 
messages in dmesg after attempting this ?

** Also affects: virt-manager (Ubuntu)
   Importance: Undecided
       Status: New

** Changed in: libvirt (Ubuntu)
   Importance: Undecided => Low

** Changed in: libvirt (Ubuntu)
       Status: New => Incomplete

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does not support cloning vm storage on lvm backend
https://bugs.launchpad.net/bugs/613549
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