One of the trends I told Joanna about (i.e secure L4 kernels) led to folks developing exactly that. It was called KVM-L4. Here you go.

http://os.inf.tu-dresden.de/papers_ps/liebergeld-diplom.pdf

Complexity was still yoo high. Most in high-assurance security were trying stuff like Nova microhypervisor as a result. KVM on separation kernels might be worth further investigation for these platforms that will stay on KVM regardless.