A. A huge yes to this question. I recently switched to using the iSCSI Target that's available for WSS 2008 and it works great with my Windows Server 2008 R2 Hyper-V failover cluster, which uses CSV. I actually run the WSS 2008 instance in a virtual machine itself (but not stored on CSV).
The iSCSI Target supports both SCSI-2 and SCSI-3 persistent reservations. As you can see below, my WSS 2008 iSCSI-based cluster passed all the disk tests with no problem.
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