Hello!
With SLES 11 SP4 for B1 is even more interesting. After creating new VM from SUSE Linux Enterprise Server 11 SP4 template, VM won't start with error message:
"Could not access file:///tmp/cdrom-repo-LiRfAA/boot/x86_64/vmlinuz-xen"

After unpacking the iso file there is no PV version of kernel indeed. So I changed domain-type to hvm and PV-bootloader to empty. Now installation process is interupting very similar to the SLES 12 SP3 for B1, but messages this time are more accurate and they confirm my earlier suspicions.
(...)
Found CD/DVD: /dev/cdrom
UDF-fs: Partition marked readonly; forcing readonly mount
Searching harddrive for CD installation
no block device found
no block device found (<---yes, twice)
No device(s) for installation found... abort
rebootException: reboot in 120 sec...


Well i'm stuck again/still. Any help, plz?

Regards, Eryk.