I've the same exact problem. I had to manually run grub2-mkconfig in my all F17 boxes.
Did you update the kernel at the same time? That looks like what you might get with grubby which is run (which doesn't handle xen very well, which is why xen-hypervisor runs grub2-mkconfig).
This is also discussed as an aside at:
https://bugzilla.redhat.com/show_bug.cgi?id=738085