From what I read in the documentation, local drive space is ONLY available if the drive is not partitioned meaning; a free hard-disk.
Your issue is /dev/sdb
When you install the OVM server, DON'T select the second partition when you configure your partitions - leave it as RAW space...
If sdb is partitioned at all, OVM won't accept it as local storage.
Thanks for your replies
Agree with first reply, i think OVS cannot see the operating system installed drive no matter of whatever free space left over there. What I did is, broke my RAID and created two VDs, first 2 drives with RAID1 for operating system VD, rest of the drives left for VD2 for local storage. This way OVS could identify the VD2 as local storage. eventhough plenty of space left free unallocated in the first VD where OVS OS is installed, still not available for storage.
In short, separate disk should be for local storage, not partitions. If anyone has different way to identify OS disk as storage, kindly share.