Why does virt-v2v fail with "virtio configured, but no virtio kernel" ?

Issue

• virt-v2v fails with the following error while converting from KVM to RHEV environment .

virt-v2v -ic qemu+ssh://root@192.168.0.17/system -o rhev -os 192.168.0.254:/exports --network rhevm VM1

• virt-v2v fails when grub.conf contains "setkey" syntax .
  For instance /boot/grub/grub.conf:

title PartedMagic
        lock
        root (hd0,0)
        kernel /pmagic/bzImage64 root=/dev/sda1 keymap=fr-latin9 edd=off load_ramdisk=1 prompt_ramdisk=0 rw loglevel=9 max_loop=256 numlock=on nopcmcia nogpm nosshd nosound nobluetooth nowicd modprobe.blacklist=qla2xxx,qla3xxx,qla4xxx,qla1280,mptsas,mptspi,mptscsih,mpt2sas,mptlan,mptfc,mptctl,bnx2i,iscsi_tcp,cxgb3i
        initrd /pmagic/initramfs64

title PartedMagic - Alternate options
        lock
        root (hd0,0)
        kernel /pmagic/bzImage64 root=/dev/sda1 keymap=fr-latin9 edd=off load_ramdisk=1 prompt_ramdisk=0 rw loglevel=9 max_loop=256 numlock=on acpi=off nolapic nopcmcia noscsi nogpm nosmart nosshd nosound nobluetooth nowicd noacpid modprobe.blacklist=qla2xxx,qla3xxx,qla4xxx,qla1280,mptsas,mptspi,mptscsih,mpt2sas,mptlan,mptfc,mptctl,bnx2i,iscsi_tcp,cxgb3i
        initrd /pmagic/initramfs64

• virt-v2v fails when grub.conf contains "setkey" syntax .
  For instance /boot/grub/grub.conf:

setkey 0 parenright
setkey parenright minus
setkey numbersign underscore