diff --git a/cmd/limactl/start.go b/cmd/limactl/start.go
index 0d78bc1e0cd..ede6f4c1712 100644
--- a/cmd/limactl/start.go
+++ b/cmd/limactl/start.go
@@ -329,6 +329,7 @@ func chooseNextCreatorState(ctx context.Context, tmpl *limatmpl.Template, yq str
 			hdr += editutil.GenerateEditorWarningHeader()
 			var err error
 			tmpl.Bytes, err = editutil.OpenEditor(tmpl.Bytes, hdr)
+			tmpl.Config = nil
 			if err != nil {
 				return tmpl, err
 			}
@@ -337,6 +338,10 @@ func chooseNextCreatorState(ctx context.Context, tmpl *limatmpl.Template, yq str
 				logrus.Info(msg)
 				return nil, exitSuccessError{Msg: msg}
 			}
+			err = tmpl.Embed(ctx, true, true)
+			if err != nil {
+				return nil, err
+			}
 			return tmpl, nil
 		case 2: // "Choose another template..."
 			templates, err := filterHiddenTemplates()
diff --git a/pkg/instance/start.go b/pkg/instance/start.go
index e465fa2755f..960b1ae1ae9 100644
--- a/pkg/instance/start.go
+++ b/pkg/instance/start.go
@@ -12,13 +12,11 @@ import (
 	"os"
 	"os/exec"
 	"path/filepath"
-	"syscall"
 	"text/template"
 	"time"
 
 	"github.com/docker/go-units"
 	"github.com/lima-vm/go-qcow2reader"
-	"github.com/mattn/go-isatty"
 	"github.com/sirupsen/logrus"
 
 	"github.com/lima-vm/lima/pkg/downloader"
@@ -29,7 +27,6 @@ import (
 	hostagentevents "github.com/lima-vm/lima/pkg/hostagent/events"
 	"github.com/lima-vm/lima/pkg/imgutil/proxyimgutil"
 	"github.com/lima-vm/lima/pkg/limayaml"
-	"github.com/lima-vm/lima/pkg/osutil"
 	"github.com/lima-vm/lima/pkg/store"
 	"github.com/lima-vm/lima/pkg/store/filenames"
 	"github.com/lima-vm/lima/pkg/usrlocalsharelima"
@@ -249,25 +246,7 @@ func Start(ctx context.Context, inst *store.Instance, limactl string, launchHost
 	begin := time.Now() // used for logrus propagation
 
 	if launchHostAgentForeground {
-		logrus.Info("Running the host agent in the foreground")
-		if isatty.IsTerminal(os.Stdin.Fd()) || isatty.IsCygwinTerminal(os.Stdin.Fd()) {
-			// Write message to standard log files to avoid confusing users
-			message := "This log file is not used because `limactl start` was launched in the terminal with the `--foreground` option."
-			if _, err := haStdoutW.WriteString(message); err != nil {
-				return err
-			}
-			if _, err := haStderrW.WriteString(message); err != nil {
-				return err
-			}
-		} else {
-			if err := osutil.Dup2(int(haStdoutW.Fd()), syscall.Stdout); err != nil {
-				return err
-			}
-			if err := osutil.Dup2(int(haStderrW.Fd()), syscall.Stderr); err != nil {
-				return err
-			}
-		}
-		if err := syscall.Exec(limactl, haCmd.Args, haCmd.Environ()); err != nil {
+		if err := execHostAgentForeground(limactl, haCmd); err != nil {
 			return err
 		}
 	} else if err := haCmd.Start(); err != nil {
diff --git a/pkg/instance/start_unix.go b/pkg/instance/start_unix.go
new file mode 100644
index 00000000000..e1c44d71dd0
--- /dev/null
+++ b/pkg/instance/start_unix.go
@@ -0,0 +1,48 @@
+//go:build !windows
+
+// SPDX-FileCopyrightText: Copyright The Lima Authors
+// SPDX-License-Identifier: Apache-2.0
+
+package instance
+
+import (
+	"fmt"
+	"os"
+	"os/exec"
+	"syscall"
+
+	"github.com/mattn/go-isatty"
+	"github.com/sirupsen/logrus"
+
+	"github.com/lima-vm/lima/pkg/osutil"
+)
+
+func execHostAgentForeground(limactl string, haCmd *exec.Cmd) error {
+	haStdoutW, ok := haCmd.Stdout.(*os.File)
+	if !ok {
+		return fmt.Errorf("expected haCmd.Stdout to be *os.File, got %T", haCmd.Stdout)
+	}
+	haStderrW, ok := haCmd.Stderr.(*os.File)
+	if !ok {
+		return fmt.Errorf("expected haCmd.Stderr to be *os.File, got %T", haCmd.Stderr)
+	}
+	logrus.Info("Running the host agent in the foreground")
+	if isatty.IsTerminal(os.Stdin.Fd()) || isatty.IsCygwinTerminal(os.Stdin.Fd()) {
+		// Write message to standard log files to avoid confusing users
+		message := "This log file is not used because `limactl start` was launched in the terminal with the `--foreground` option."
+		if _, err := haStdoutW.WriteString(message); err != nil {
+			return err
+		}
+		if _, err := haStderrW.WriteString(message); err != nil {
+			return err
+		}
+	} else {
+		if err := osutil.Dup2(int(haStdoutW.Fd()), syscall.Stdout); err != nil {
+			return err
+		}
+		if err := osutil.Dup2(int(haStderrW.Fd()), syscall.Stderr); err != nil {
+			return err
+		}
+	}
+	return syscall.Exec(limactl, haCmd.Args, haCmd.Environ())
+}
diff --git a/pkg/instance/start_windows.go b/pkg/instance/start_windows.go
new file mode 100644
index 00000000000..2f85c03aec9
--- /dev/null
+++ b/pkg/instance/start_windows.go
@@ -0,0 +1,13 @@
+// SPDX-FileCopyrightText: Copyright The Lima Authors
+// SPDX-License-Identifier: Apache-2.0
+
+package instance
+
+import (
+	"errors"
+	"os/exec"
+)
+
+func execHostAgentForeground(_ string, _ *exec.Cmd) error {
+	return errors.New("`limactl start --foreground` is not supported on Windows")
+}
diff --git a/pkg/portfwd/client.go b/pkg/portfwd/client.go
index 81c5c21e17b..944032945a4 100644
--- a/pkg/portfwd/client.go
+++ b/pkg/portfwd/client.go
@@ -7,6 +7,7 @@ import (
 	"context"
 	"fmt"
 	"net"
+	"sync/atomic"
 	"time"
 
 	"github.com/containers/gvisor-tap-vsock/pkg/services/forwarder"
@@ -40,33 +41,35 @@ func HandleTCPConnection(ctx context.Context, client *guestagentclient.GuestAgen
 }
 
 func HandleUDPConnection(ctx context.Context, client *guestagentclient.GuestAgentClient, conn net.PacketConn, guestAddr string) {
-	id := fmt.Sprintf("udp-%s", conn.LocalAddr().String())
-
-	stream, err := client.Tunnel(ctx)
-	if err != nil {
-		logrus.Errorf("could not open udp tunnel for id: %s error:%v", id, err)
-		return
-	}
-
-	// Handshake message to start tunnel
-	if err := stream.Send(&api.TunnelMessage{Id: id, Protocol: "udp", GuestAddr: guestAddr}); err != nil {
-		logrus.Errorf("could not start udp tunnel for id: %s error:%v", id, err)
-		return
-	}
+	var udpConnectionCounter atomic.Uint32
+	initialID := fmt.Sprintf("udp-%s", conn.LocalAddr().String())
 
+	// gvisor-tap-vsock's UDPProxy demultiplexes client connections internally based on their source address.
+	// It calls this dialer function only when it receives a datagram from a new, unrecognized client.
+	// For each new client, we must return a new net.Conn, which in our case is a new gRPC stream.
+	// The atomic counter ensures that each stream has a unique ID to distinguish them on the server side.
 	proxy, err := forwarder.NewUDPProxy(conn, func() (net.Conn, error) {
+		id := fmt.Sprintf("%s-%d", initialID, udpConnectionCounter.Add(1))
+		stream, err := client.Tunnel(ctx)
+		if err != nil {
+			return nil, fmt.Errorf("could not open udp tunnel for id: %s error:%w", id, err)
+		}
+		// Handshake message to start tunnel
+		if err := stream.Send(&api.TunnelMessage{Id: id, Protocol: "udp", GuestAddr: guestAddr}); err != nil {
+			return nil, fmt.Errorf("could not start udp tunnel for id: %s error:%w", id, err)
+		}
 		rw := &GrpcClientRW{stream: stream, id: id, addr: guestAddr, protocol: "udp"}
 		return rw, nil
 	})
 	if err != nil {
-		logrus.Errorf("error in udp tunnel proxy for id: %s error:%v", id, err)
+		logrus.Errorf("error in udp tunnel proxy for id: %s error:%v", initialID, err)
 		return
 	}
 
 	defer func() {
 		err := proxy.Close()
 		if err != nil {
-			logrus.Errorf("error in closing udp tunnel proxy for id: %s error:%v", id, err)
+			logrus.Errorf("error in closing udp tunnel proxy for id: %s error:%v", initialID, err)
 		}
 	}()
 	proxy.Run()
diff --git a/pkg/qemuimgutil/qemuimgutil.go b/pkg/qemuimgutil/qemuimgutil.go
index fc065450c59..8872eb56d52 100644
--- a/pkg/qemuimgutil/qemuimgutil.go
+++ b/pkg/qemuimgutil/qemuimgutil.go
@@ -103,6 +103,31 @@ type InfoFormatSpecificDataVmdkExtent struct {
 }
 
 func convertToRaw(source, dest string) error {
+	if source != dest {
+		return execQemuImgConvert(source, dest)
+	}
+
+	// If source == dest, we need to use a temporary file to avoid file locking issues
+
+	info, err := getInfo(source)
+	if err != nil {
+		return fmt.Errorf("failed to get info for source disk %q: %w", source, err)
+	}
+	if info.Format == "raw" {
+		return nil
+	}
+
+	tempFile := dest + ".lima-qemu-convert.tmp"
+	defer os.Remove(tempFile)
+
+	if err := execQemuImgConvert(source, tempFile); err != nil {
+		return err
+	}
+
+	return os.Rename(tempFile, dest)
+}
+
+func execQemuImgConvert(source, dest string) error {
 	var stdout, stderr bytes.Buffer
 	cmd := exec.Command("qemu-img", "convert", "-O", "raw", source, dest)
 	cmd.Stdout = &stdout