Hosted-Engine deploy with iSCSI and RHEV-M appliances fails with "error while converting raw: Permission denied" in Red Hat Enterprise Virtualization 3.5.3

Issue

• Hosted-Engine deploy fails when extracting the ova archive to the guest logical volume with message error while converting raw: Permission denied
• Complete error message ovirt-hosted-engine-setup-xxx.log:

2015-08-02 10:33:35 DEBUG otopi.plugins.ovirt_hosted_engine_setup.vm.boot_disk plugin.execute:937 execute-output: ('/usr/bin/sudo', '-u', 'vdsm', '-g', 'kvm', '/usr/bin/qemu-img', 'convert', '-O', 'raw', '/tmp/tmpP6eF66', '/rhev/data-center/mnt/blockSD/1ab81e06-7806-4316-b332-45d7afc9640c/images/7ad03851-fa77-4dd7-9c6f-d17eafff2cfe/87bbdd4a-bad6-4c6a-812d-5a58bbb192ca') stderr:
/rhev/data-center/mnt/blockSD/1ab81e06-7806-4316-b332-45d7afc9640c/images/7ad03851-fa77-4dd7-9c6f-d17eafff2cfe/87bbdd4a-bad6-4c6a-812d-5a58bbb192ca: error while converting raw: Permission denied

2015-08-02 10:33:35 DEBUG otopi.context context._executeMethod:152 method exception
Traceback (most recent call last):
  File "/usr/lib/python2.6/site-packages/otopi/context.py", line 142, in _executeMethod
    method['method']()
  File "/usr/share/ovirt-hosted-engine-setup/scripts/../plugins/ovirt-hosted-engine-setup/vm/boot_disk.py", line 513, in _misc
    dst=self._image_path,
  File "/usr/lib/python2.6/site-packages/otopi/transaction.py", line 168, in __exit__
    self.commit()
  File "/usr/lib/python2.6/site-packages/otopi/transaction.py", line 160, in commit
    element.commit()
  File "/usr/share/ovirt-hosted-engine-setup/scripts/../plugins/ovirt-hosted-engine-setup/vm/boot_disk.py", line 209, in commit
    raise RuntimeError(message)
RuntimeError: Command '/usr/bin/sudo' failed to execute
2015-08-02 10:33:35 ERROR otopi.context context._executeMethod:161 Failed to execute stage 'Misc configuration': Command '/usr/bin/sudo' failed to execute