Comment 41 for bug 543617

Looks barrier related, if you change the mount -o loop to mount -o loop,nobarrier, it's speedy.

commit 68db1961bbf4e16c220ccec4a780e966bc1fece3
Author: Nikanth Karthikesan <email address hidden>
Date: Tue Mar 24 12:29:54 2009 +0100

    loop: support barrier writes

    Honour barrier requests in the loop back block device driver.
    In case of barrier bios, flush the backing file once before processing the
    barrier and once after to guarantee ordering. In case of filesystems that
    does not support fsync, barrier bios would be failed with -EOPNOTSUPP.

    Signed-off-by: Nikanth Karthikesan <email address hidden>
    Signed-off-by: Jens Axboe <email address hidden>

So you're fsyncing the loop file 2x for each barrier, and those fsyncs in turn cause cache flushes on your underlying device; once upon a time lvm didn't do anything there, but now it does ... I think you're just getting bitten by the new and improved barrier support at every level.

-Eric