I can't tell what exactly is wrong on your machine, but I can say for
certain that updating only the kernel can not break anything in such a
way. There has to be something wrong with libvirt or it's configuration.

libvirt manager talks to libvirt, libvirt stores the config and starts
qemu. It is possible to use qemu without libvirt, but let's try just
fixing this for now.
The "network 'default'" refers to the network configuration which is
named 'default', and is managed by libvirt. The 'default' one comes, as
the name suggests, by default with the libvirt installation. It is
possible to remove or modify it, though.
These network configs can include various things. Bridges, NAT, dhcp,
etc. VMs can then use one of those configs. They must be active for
that, though. When a network config is activated, it sets up the bridges
and stuff which VMs can then later use.

If you have virsh installed, you can easily list the networks using
`virsh net-list --all`. On my system, that looks like this:

daniel@jerboa:~$ virsh net-list --all
  Name      State      Autostart   Persistent
----------------------------------------------
  default   inactive   no          yes
  dmz       active     yes         yes
  iot       active     yes         yes
  lan       active     yes         yes

As you can see, I don't actually use the default network, so I haven't
started it, but you probably need to start it on your system. On my
system, the default network config looks like this:

daniel@jerboa:~$ virsh net-dumpxml default
<network>
   <name>default</name>
   <uuid>1c88998c-27a7-4423-9f74-4940c6bcc479</uuid>
   <forward mode='nat'/>
   <bridge name='virbr0' stp='on' delay='0'/>
   <mac address='52:54:00:e4:10:24'/>
   <ip address='192.168.122.1' netmask='255.255.255.0'>
     <dhcp>
       <range start='192.168.122.2' end='192.168.122.254'/>
     </dhcp>
   </ip>
</network>

So it'd create a bridge (think of it like a switch), does NAT (so this
works a lot like a router), and uses dhcp to give VMs an address.

Now to how to fix this. First, try to start the default network. You can
do this using `virsh net-start default`.
You probably also want it to start automatically when libvirt or the
system starts, that can be enabled using `virsh net-autostart default`.

If you're lucky, maybe that's all that needs to be done. The default
network just wasn't set to autostart, so it didn't start after the
reboot, and you couldn't start the VM because it needed that network.

Regards,
Daniel Abrecht