This booting error is because the Xen PV guest image uses the Xen kernel, this is not compatible with anything but a host running a Xen kernel. I did a kpartx -av virtual.img and then it created some partitions that showed up in fdisk. I mounted it and did a chroot into it and removed the xen kernel and installed a normal kernel but Xen still shows the same kernel in Grub (only the Xen one). This is strange but it seems like this Xen PV guest has some sort of hidden or........

fdisk -lu VPS.img last_lba(): I don't know how to handle files with mode 81ed You must set cylinders. You can do this from the extra functions menu. Disk VPS.img: 0 MB, 0 bytes 255 heads, 63 sectors/track, 0 cylinders, total 0 sectors Units = sectors of 1 * 512 = 512 bytes Device Boot Start End ........