Is it possible to pass /dev/urandom through from the host to a qemu/kvm guest

While QEMU is able to emulate a usb-storage device, AFAIK, it is not able to boot directly from it. KVM should be similar. One other option that I would recommend for you is this. I'm not sure if it will work as I have not tried it myself by it probably would.

Use your drive image as a usb-storage device. However, boot by specifying the kernel and initrd directly on the command line. So, something like this:

kvm -kernel <kernel image> -initrd <initrd image> -usb <usb options> ...

To make the emulation more accurate, you should use the kernel and initrd images extracted from your drive image. This will boot your kernel, which should have the USB drivers built in to detect /dev/sda and then load your initrd, which will do it's magic. Then, boot should proceed using your drive image as /root as usual.

It should 'just work'. Even though the vm has no dedicated physical hardware, it still has access to several very good sources of randomness. For example, it can use the CPU's TSC to time its read from virtual disks, which will ultimately wind up timing physical disks to the billionth of a second. These timings depend on turbulent airflow shear in the hard drive, which is unpredictable.

Similar logic applies to network traffic. Even though the interface is virtualized, so long as the packet originates on a physical network (and isn't local to the box, say originating in another vm), the packet timing depends on the phase offset between the crystal oscillator on the network card and the crystal oscillator that drives the TSC. This is dependent on microscopic zone temperature variations in the two quartz crystals. This too is unpredictable.

If for some reason it's not working, the simplest solution is to write a program to mine entropy and add it to the system pool. The network interface is your most reliable source. For example, you can write code to:

1) Query the TSC.

2) Issue a DNS query to a server known not to be on the same physical machine.

3) Query the TSC when the query completes.

4) Repeat this a few times, accumulating all the TSC values.

5) Perform a secure hash on the accumulated TSC functions.

6) Pass the secure hash function's output to the system's entropy pool.

7) Monitor the entropy pool level, and wait until it's low. When it is, go back to step 1.

Linux has simple IOCTL calls to add entropy to the pool, check the pool's level, and so on. You probably have rngd, which can take entropy from a pipe and feed it to the system pool. You can fill the pipe from any source you want, whether it's the TSC or 'wget' requests from your own entropy source.