docs: update STATUS and JOURNAL for ISO build verification session

Session 10 results: demo ISO built (825MB) and boot-verified to login
prompt via serial console in QEMU VM. STATUS updated from "ready to
build" to "built and boot-verified." JOURNAL entry documents the full
session: reproducible setup script, Dockerfile pin refresh, QEMU/TPM
fallback work, and ISO boot verification with key lessons.

💘 Generated with Crush

Assisted-by: GLM-4.7 via Crush <crush@charm.land>

JOURNAL.md

@@ -6,6 +6,60 @@
 
 ---
 
+## Entry 2026-07-30 (Session 10): Reproducible Dev Environment + ISO Build Verification
+
+### Context
+Fresh clone on a new dev machine. No working dev environment — Docker image pins had
+rotted (Debian security updates made 8 pinned versions unavailable), no VM tooling
+installed, no git hooks. Goal: restore full working environment reproducibly and verify
+the ISO actually boots.
+
+### Changes
+
+**Reproducible setup script (`scripts/setup-dev-environment.sh`):**
+- New idempotent script that sets up the entire dev environment from a fresh clone
+- Installs Docker, builds dev image, configures git hooks, creates working dirs
+- Installs VM tooling (libvirt/qemu/ovmf/swtpm) by default; `--skip-vm` to opt out
+- Runs smoke test (lint + unit tests) and prints status summary
+- AGENTS.md mandatory first-actions now points at this script
+
+**Dockerfile pin refresh (fix: broken build on fresh clone):**
+- curl 8.14.1-2+deb13u2 -> deb13u4
+- grub-pc-bin / grub-efi-amd64-bin / grub-efi-ia32-bin 2.12-9+deb13u1 -> deb13u2
+- shim-signed 1.47+15.8-1 -> 1.51~1+deb13u1+16.1-2~deb13u1
+- systemd-boot-efi 257.9-1~deb13u1 -> 257.13-1~deb13u1
+- gpg / gpg-agent 2.4.7-21+deb13u1+b2 -> +b4
+- Lesson: apt-pinned versions rot as Debian ships security updates. Consider CI check.
+
+**VM testing QEMU fallback (`run.sh` + `vm/template.xml`):**
+- VM template: hardcoded `type='kvm'` + `cpu mode='host-passthrough'` replaced with
+  `@DOMAIN_TYPE@` and `@CPU_ELEMENT@` placeholders
+- run.sh: detects `/dev/kvm` at runtime; falls back to `type='qemu'` + `qemu64` CPU
+  model when KVM unavailable (nested VMs, CI, containers)
+- TPM retry: if VM start fails with swtpm, retries without TPM (not needed for boot test)
+- 6 new unit tests covering placeholder existence, KVM detection, substitution logic
+
+**ISO build + boot verification:**
+- Built demo ISO: `output/knel-football-secure.iso` (825MB, demo mode, serial console)
+- Booted in QEMU VM (no KVM available — parent hypervisor doesn't expose VT-x)
+- Serial console captured: kernel boot, systemd init, live-config, reached login prompt
+- Login prompt confirmed: `Debian GNU/Linux 13 debian ttyS0` / `debian login:`
+
+### Key Lessons
+1. **Apt version pins rot** — pinned versions disappear from archives after security
+   updates. Rotted pins completely broke the build on a fresh clone months later.
+2. **QEMU TCG emulation works for boot testing** — ~10x slower but gets the job done
+   when KVM isn't available. VM reached login prompt after ~30 min CPU time.
+3. **Nested virt requires parent-level config** — `kvm_intel` returns I/O error if the
+   parent hypervisor doesn't expose VT-x. Cannot fix from inside the guest VM.
+4. **swtpm setup can fail silently** — the permission fix script + qemu.conf config
+   help, but swtpm_setup can still fail for other reasons. TPM retry in vm_create()
+   makes boot testing resilient.
+5. **Serial console needs pseudo-TTY** — `virsh console` requires a real/pseudo TTY
+   (`script` command works); direct `cat` of the PTY device gets permission denied.
+
+---
+
 ## Entry 2026-05-08 (Session 9): Host FDE Removal + Final Partials Fix
 
 ### Context

STATUS.md

@@ -1,17 +1,25 @@
 # KNEL-Football Project Status Report
 
-> **Last Updated**: 2026-05-08 (Session 9 - Remove host FDE, fix remaining partials)
+> **Last Updated**: 2026-07-30 (Session 10 - ISO built and verified)
 > **Maintained By**: AI Agent (Crush)
 > **Purpose**: Quick-glance status for project manager
 
 ---
 
-## Current Status: 🔧 ALL TECHNICAL FIXES APPLIED — READY FOR ISO BUILD
+## Current Status: ✅ ISO BUILT AND BOOT-VERIFIED
 
 ### Executive Summary
-All 39 findings from DeepReport-2026-05-08.md have been addressed.
-Host FDE requirement removed — only guest (ISO) FDE is required.
-ISO is ready to build: `./run.sh iso`
+Demo ISO built successfully (825MB) and verified booting to login prompt in QEMU VM.
+Reproducible dev environment setup script added (`scripts/setup-dev-environment.sh`).
+VM testing tooling now supports QEMU fallback when KVM is unavailable.
+
+### Build & Verification Results (Session 10)
+- **ISO**: `output/knel-football-secure.iso` (825MB, demo mode)
+- **SHA256**: `c9b11932ce0fe015274c81a13bc3202ec4b52178e8fbbe146f9d0010a09b7559`
+- **Boot test**: PASS — kernel, systemd init, live-config, reached login prompt
+- **Serial console**: `Debian GNU/Linux 13 debian ttyS0` / `debian login:`
+- **Tests**: 788 pass, 0 fail (6 new KVM/QEMU fallback tests)
+- **Lint**: 0 warnings
 
 ### Immediate Action: Build the ISO
 ```bash
@@ -79,10 +87,11 @@ ISO is ready to build: `./run.sh iso`
 
 | Item | Status |
 |------|--------|
-| Docker image | ✅ Built with new packages |
+| Docker image | ✅ Built with refreshed pins |
 | Lint (shellcheck) | ✅ 0 warnings |
-| Tests | ✅ 782 pass, 0 fail |
-| ISO build | ⬜ Ready — run `./run.sh iso` |
+| Tests | ✅ 788 pass, 0 fail |
+| ISO build | ✅ Built (demo, 825MB) |
+| ISO boot test | ✅ Reached login prompt via serial console |
 
 ---