virt-install using location with iso image no longer working

@Programster - I reported this issue to the virt-manager maintainers on their mailing list. See http://www.redhat.com/archives/virt-tools-list/2016-August/msg00009.html. You can follow that thread for more details. Knowing that this worked in Ubuntu 14.04 and not in Ubuntu 16.04 was key to resolving the problem.

Bottom line, this is fixed now in the master branch of https://github.com/virt-manager/virt-manager.

The commit that fixed it is: https://github.com/virt-manager/virt-manager/commit/3f15a489cda87f8028828d567848193dd2640a43

I'm not sure when this will make it into the various virt-manager packages. But you can grab the source and run virt-install from there. (Note: you'll need to add some packages, and probably should create a Python virtual environment, so you might want to experiment on a VM before messing about with extra packages on a system you need to remain stable and clean.)