This happened on novato-arc64-release:
https://cros-goldeneye.corp.google.com/chromeos/healthmonitoring/buildDetails?buildbucketId=8934525056097550464

Notably, logs (under "VMTest (attempt 1)") show that, first of all, all tests have succeeded:

> Total PASS: 113/113 (100%)
> Logging the data into test_report.html file.
> 04:34:50 INFO | Finished running tests. Results can be found in <...>

and the failure happened after that:

> 2018/09/24 04:39:26 - devinstall_test.py - ERROR   : dev-install test failed. See devserver log above for more details.
> 2018/09/24 04:39:26 - dev_server_wrapper.py - DEBUG   : Stopping devserver instance with pid 23998
> 2018/09/24 04:39:26 - cros_build_lib.py - DEBUG   : RunCommand: sudo 'CROS_CACHEDIR=/b/swarming/wsy0Gfz/ir/cache/cbuild/repository/.cache' 'CROS_SUDO_KEEP_ALIVE=unknown' -- kill 23998
> 2018/09/24 04:39:26 - cros_build_lib.py - DEBUG   : RunCommand: sudo 'CROS_CACHEDIR=/b/swarming/wsy0Gfz/ir/cache/cbuild/repository/.cache' 'CROS_SUDO_KEEP_ALIVE=unknown' -- rm -rf -- /b/swarming/wsy0Gfz/ir/cache/cbuild/repository/chroot/tmp/devserver_wrapperacHN8v
> 2018/09/24 04:39:26 - cros_build_lib.py - DEBUG   : RunCommand: /b/swarming/wsy0Gfz/ir/cache/cbuild/repository/src/scripts/bin/cros_stop_vm --kvm_pid /b/swarming/wsy0Gfz/ir/tmp/t/cbuildbot-tmpyujQKT/tmpmTqE99DevModeTest/kvm.pid
> Traceback (most recent call last):
>   File "/b/swarming/wsy0Gfz/ir/cache/cbuild/repository/src/platform/crostestutils/devmode-test/devinstall_test.py", line 192, in <module>
>     main()
>   File "/b/swarming/wsy0Gfz/ir/cache/cbuild/repository/src/platform/crostestutils/devmode-test/devinstall_test.py", line 189, in main
>     options.binhost).Run()
>   File "/b/swarming/wsy0Gfz/ir/cache/cbuild/repository/src/platform/crostestutils/devmode-test/devinstall_test.py", line 169, in Run
>     self.TestDevInstall()
>   File "/b/swarming/wsy0Gfz/ir/cache/cbuild/repository/src/platform/crostestutils/devmode-test/devinstall_test.py", line 150, in TestDevInstall
>     raise TestError('dev-install test failed with: %s' % str(e))
> __main__.TestError: dev-install test failed with: Connection timed out during banner exchange

Later, in the second attempt (logs under "VMTest (attempt 2)") nothing worked straight away:

> Starting a KVM instance
> INFO    : Set kvm_smp to min(8, 32).
> INFO    : Launching: /b/swarming/wsy0Gfz/ir/cache/cbuild/repository/chroot/usr/bin/qemu-system-x86_64 -enable-kvm -m 8G -smp 8 -cpu SandyBridge,-invpcid,-tsc-deadline,check -vga virtio -pidfile /tmp/kvm.9228 -chardev pipe,id=control_pipe,path=/tmp/kvm.9228.monitor -serial file:/tmp/kvm.9228.serial -mon chardev=control_pipe -daemonize -device virtio-net,netdev=eth0 -display none -netdev user,id=eth0,net=10.0.2.0/27,hostfwd=tcp:127.0.0.1:9228-:22 -drive file=/b/swarming/wsy0Gfz/ir/tmp/t/cbuildbot-tmpyujQKT/chromiumos_qemu_disk.bin.XfhHdI,index=0,media=disk,cache=unsafe
> WARNING: Image format was not specified for '/b/swarming/wsy0Gfz/ir/tmp/t/cbuildbot-tmpyujQKT/chromiumos_qemu_disk.bin.XfhHdI' and probing guessed raw.
>          Automatically detecting the format is dangerous for raw images, write operations on block 0 will be restricted.
>          Specify the 'raw' format explicitly to remove the restrictions.
> INFO    : KVM started with pid stored in /tmp/kvm.9228
> INFO    : Serial output, if available, can be found in /tmp/kvm.9228.serial
> Could not initiate first contact with remote host
> Connection timed out during banner exchange
> Connection timed out during banner exchange
> Failed to connect to virtual machine, retrying ...