I have been setting up a test Xen 3.3 box running on Ubuntu 8.04. I have been getting the following error: “Device xxxx (vbd) cannot be connected. failed to find an unused loop device”  where xxxx is some number. It turns out that by default only 8 loopback devices are enabled. The following command shows how many loopback devices are enabled:

ls -l /dev/loop*

To increase the number of loopback devices the following line needs to be added to the /etc/modules file. I used a value of 64 so I can run up to 32 virtual machines.

add loop max_loop=64
Now when you run ls -l /dev/loop* you will see additional loopback devices.

root@xen-server:~# ls -l /dev/loop*
brw-rw—- 1 root disk 7,  0 2009-07-09 03:43 /dev/loop0
brw-rw—- 1 root disk 7,  1 2010-02-02 15:22 /dev/loop1
brw-rw—- 1 root disk 7, 10 2010-02-02 15:22 /dev/loop10
brw-rw—- 1 root disk 7, 11 2010-02-02 15:22 /dev/loop11
brw-rw—- 1 root disk 7, 12 2010-02-02 15:22 /dev/loop12
brw-rw—- 1 root disk 7, 13 2010-02-02 15:22 /dev/loop13
brw-rw—- 1 root disk 7, 14 2010-02-02 15:22 /dev/loop14
brw-rw—- 1 root disk 7, 15 2010-02-02 15:22 /dev/loop15
brw-rw—- 1 root disk 7, 16 2010-02-02 15:22 /dev/loop16
brw-rw—- 1 root disk 7, 17 2010-02-02 15:22 /dev/loop17
brw-rw—- 1 root disk 7, 18 2010-02-02 15:22 /dev/loop18
brw-rw—- 1 root disk 7, 19 2010-02-02 15:22 /dev/loop19
brw-rw—- 1 root disk 7,  2 2010-02-02 15:22 /dev/loop2
brw-rw—- 1 root disk 7, 20 2010-02-02 15:22 /dev/loop20
…