I went to update the Nevada image on my jumpstart server today, and noticed that my loopback mount was performing terribly:
extended device statistics r/s w/s Mr/s Mw/s wait actv wsvc_t asvc_t %w %b device 11.5 0.0 0.0 0.0 0.0 1.0 0.0 86.5 0 99 lofi1
Ouch! 11 reads per second causes the loopback device to become 100% busy. It turns out this is bug #6806627, which is fixed in Nevada build 112. I got around the issue by using a Linux host to copy the CD contents, and then running setup_install_server from that location. Now I should be able to live upgrade the host to something a bit more current.