Currently my SE Linux Play Machine  is running as a Xen DomU. So if someone cracks it they would also have to crack Xen to get access to directly change things on the hardware (EG modifying the boot process). As documented in my last post  a user of my Play Machine recently managed to change my password. Of course this was just two days after the vmsplice() kernel security flaw had been discovered . Of course any machine that offers shell access to remote users (or the ability to run CGI-BIN scripts or other programs that users can upload) is immediately vulnerable to such exploits and while SE Linux has blocked local kernel exploits in the past  there will always be the possibility of kernel exploits that SE Linux can’t block or which can be re-written to work in a way that is not stopped by the SE Linux policy. So it’s best to assume that SE Linux systems are vulnerable to kernel exploits.
At the time that the vmsplice() exploit was announced there was a claim that it could be used to de-stabilise a Xen Dom0 when run within a DomU. It’s best to assume that any attack which can make some software perform in an unexpected manner can also be used to successfully attack it. So at the time I was working on the assumption that the Dom0 could have been exploited.
Therefore I reinstalled the entire machine, I firstly installed a new Dom0 (on which I decided to run Debian/Unstable) and then I made a fresh install of Etch for the Play Machine. There is a possibility that an attacker could compromise the hardware (changing the BIOS or other similar attacks), but this seems unlikely – I doubt that someone would go to such effort to attach hardware that I use for demonstrating SE Linux and for SE Linux development (it has no data which is secret).
If someone attacks my Play Machine they would have to first get root on the DomU in question and then crack Xen to get access to the hardware. Then the machine is on a separate Ethernet segment which has less access to my internal network than the general Internet does (so they would not gain any real benefit).
One thing an attacker can do is launch a DOS attack on my machine. One summer a Play Machine overheated and died, I suspect that the extra heat produced by a DOS attack contributed to that problem. But losing a low-end machine I bought second-hand is not a big deal.
When discussing the machine there are two common comments I get. One is a suggestion that I am putting myself at risk, I think that the risk of visiting random web sites is significantly greater. Another is a challenge to put the machine on my internal network if I really trust SE Linux, as noted I have made mistakes in the past and there have been Linux kernel bugs – but apart from that it’s always best to have multiple layers of protection.