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I am facing exactly the same problem as described on https://bugzilla.redhat.com/show_bug.cgi?id=694818 It is a Cloudmin system, was working just fine, this is the first time I see this. I keep my servers updated and I believe this one also should have been upgraded. I just can't login to it to see the kernel version. The VPS guest systems are working just fine on it, I just can't get through to root. Will simple reboot make a trick?
Edit: Yep, simple reboot helped.