Hello, I don't really know the cause of the issue beyond being related to python USEs in libvirt and few other packages related to it. If my description fails to describe the problem correctly please forgive me and provide me with the info you require to make this report useful.

On a Funtoo system running stable branch, I have the following from ~amd64:

• virt-manager
• seabios
• qemu
• libguestfs/libguestfs-appliance

During an emerge -puDN world today, the following messages appeared:

(app-emulation/libvirt-1.2.1::gentoo, ebuild scheduled for merge) conflicts with
>=app-emulation/libvirt-0.7.0[python,python_targets_python2_7(-),python_single_target_python2_7(+)] required by (app-emulation/virt-manager-0.10.0::gentoo, installed)

I removed virt-manager from package.keywords and the following showed up:

(app-emulation/libvirt-1.2.1::gentoo, ebuild scheduled for merge) conflicts with
>=app-emulation/libvirt-0.7.0[python] required by (app-emulation/virtinst-0.600.4::gentoo, ebuild scheduled for merge)
(app-emulation/libvirt-1.2.1::gentoo, ebuild scheduled for merge) conflicts with
>=app-emulation/libvirt-0.7.0[python] required by (app-emulation/virt-manager-0.9.5::gentoo, ebuild scheduled for merge)

Messing around with virt-manager ebuild I modified libvirt-0.7.0[python...] to libvirt-1.2.1[python...], re-added virt-manager to package.keywords, and the following message showed up:

emerge: there are no ebuilds built with USE flags to satisfy ">=app-emulation/libvirt-1.2.1[python,python_targets_python2_6(-)?,python_targets_python2_7(-)?,python_single_target_python2_6(+)?,python_single_target_python2_7(+)?]".
!!! One of the following packages is required to complete your request:

• app-emulation/libvirt-1.2.1::gentoo (Missing IUSE: python)
  (dependency required by "app-emulation/virt-manager-0.10.0" [installed])
  (dependency required by "@selected" [set])
  (dependency required by "@world" [argument])

Checking libvirt-1.2.1.ebuild USEs, it doesn't indicate that it uses/requires python:

IUSE="audit avahi +caps firewalld fuse iscsi +libvirtd lvm lxc +macvtap nfs \
nls numa openvz parted pcap phyp policykit +qemu rbd sasl \
selinux +udev uml +vepa virtualbox virt-network xen elibc_glibc \
systemd"

So I added python to IUSE and retried...

The following came up again:

app-emulation/libvirt:0

(app-emulation/libvirt-1.2.1::gentoo, ebuild scheduled for merge) conflicts with
>=app-emulation/libvirt-0.7.0[python,python_targets_python2_7(-),python_single_target_python2_7(+)] required by (app-emulation/virt-manager-0.10.0::gentoo, installed)

Being python related, I decided to modify virt-manager-0.10.0.ebuild RDEPEND statement from this:

>=app-emulation/libvirt-0.7.0[python,${PYTHON_USEDEP}]

to this:

>=app-emulation/libvirt-0.7.0[python]

And done, I was able to update without blocks of any kind related to libvirt et al.

I don't know if the steps I took are "sane" or not, this is not really a patch-bug, I'm not providing a solution (unless the mad steps I did are actually a solution), I'm just reporting.

Also being this my first report I probably did something wrong somewhere so don't hesitate to mention it and feel free to ask any info if required.