We're having this problem - it only affects CentOS 5.x KVM VPSs, all of which were set up with IDE drives. It does not affect CentOS 6, Ubuntu or Debian, all of which use virtio, and I think this may be a clue. It hits the CenOS 5 KVM guest that's being backed up. Hardware is Dell r710 and r720 servers, some RAID 10, some RAID 6. All image storage is local, no NFS or iSCSI for images. Sometimes the KVM guest recovers, sometimes it hangs and when that happens it's messy - we have to stop the backup, stop and restart the KVM guest (can't restart if the backup is running because it's locked, so if we do manage to kill an unresponsive KVM guest during its backup, we have to stop the backup to restart it). KVM guest image format is qcow2 for these guests.
The backup logs look normal - no errors noted. The problems are happening inside the CentOS 5 KVM guests.
I've been able to reduce the frequency of the problem a bit by editing /etc/vzdump.conf, adding bwlimit: 30000 to throttle the disk I/O - this makes the backups take noticeably longer but it has reduced the frequency of KVM guest hangs that are bad enough that we have to manually intervene.
I don't know whether this is a CentOS 5 problem or an IDE driver problem, or a combination, but the problem only affects our CentOS 5 KVM guests, which all happened to be set up using IDE, and it only affects them while they are being backed up - the CentOS 5 KVM guests don't get the "HDA lost interrupt" problem while different guests on the same physical machine are being backed up, and purposely creating heavy disk I/O on the physical servers doesn't seem to trigger the problem.
When one of these CentOS 5 guests is being backed up, we notice two things in the guest itself: we start seeing erors that look like:
hda: irq timeout: status=0xd0 { Busy }
ide: failed opcode was: unknown
ide0: reset: success
hda: lost interrupt
hda: lost interrupt
hda: lost interrupt
hda: lost interrupt
hda: task_out_intr: status=0x58 { DriveReady SeekComplete DataRequest }
ide: failed opcode was: unknown
and disk IO gets very slow, often only 1 or 2MB/sec read speed according to hdparm. I/O speed on the other KVM guests on the same physical server is normal at this time, and when the backup is finished on the CentOS 5 guest that's showing the 'lost interrupt' problem I/O goes back to normal.
I love the new backup mechanism, but we're losing a lot of sleep tending CentOS 5 KVM guests that hang in the middle of the night during their backups and for us, Proxmox 2.3 is definitely less reliable because of this than previous versions.