Had this problem when trying to start a newly created VM and install from certain ISO files. Some ISO images would work and others would not.
Removing the ISO image allowed the VM to start but obviously there was no OS image to install from.
The error message is generic and not very helpful, but if you do encounter it check that the ISO is readable by the Xen server. In our case it was on an NFS share but the permissions were read-only to all but the owner…. so a simple `chmod a+r *.iso` fixed it!