The host is SLES 12 with xen. We already have 1 2012 R2 xen VM on the host and did not have this problem. This time, the 2012 R2 install says it can not find the drive to install on:

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Here is a screenshot of the disk in the VM:

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I have tried SCSI and IDE with the same results. That virtual disk DOES exist in the listed folder. Not understanding why the install can not find the disk to install on. Anybody have any ideas?