I assume most of the difficulty here has been language-related.
no, I clearly understand your words.
I do appreciate the proxmox people trying to help. The scenario I used is from here:
http://pve.proxmox.com/wiki/Storage_Model#LVM_Groups_with_Network_Backing
getting better, now you link to the right section, last time you just linked to the very generic page.
I did exactly as it says. Create iscsi target on the NAS. Create the iscsi target using that in the Storage menu in proxmox. Add the LVM group in the storage menu in proxmox, using the iscsi target just created. We now have some storage. Create a disk in a KVM, and for the backing storage, specify the LVM we just created. It will only allow a rawfile (for reasons I now understand.) Even if the newly created disk is completely pristine, backing up the KVM will use a huge amount of storage for the lvm/iscsi disk, due to the underlying physical disk having random data in it. Does this make more sense?
You did it right and it works. As posted above I already build up a Openfiler test setup and I just can say that it works here, the backup file is just as big as the data on the block device, as expected.
So one step back: is there any open question? can you reproduce the issue on your side? if yes, how can WE reproduce it?