Environments with local storage cannot migrate virtual machines to a host in another cluster (for example when upgrading to version 4.1) because the local storage is not shared with other storage domains. To upgrade RHEV-H 3.6 hosts that have a local storage domain, reinstall the host while preserving the local storage, create a new local storage domain in the 4.1 environment, and import the previous local storage into the new domain. Follow the procedure in Upgrading to RHVH While Preserving Local Storage
in the Upgrade Guide
for Red Hat Virtualization 4.0, but install a RHVH 4.1 host instead or a 4.0 host.