What might cause packets to get dropped between a Guest and the Hypervisor?

Solution Verified - Updated -

Issue

On a busy Hypervisor with many guests, it was observed that some times packets seemed to get lost or get dropped and it was especially visible with DNS, DHCP and ARP queries. Why was this so and what can be done about it?

Environment

  • Red Hat Enterprise Linux 5.6 as KVM Hypervisor
  • Red Hat Enterprise Linux 5.x as guests.

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