I was able to do a "sys" install of Alpine linux using iohyve 0.7.9 with the loader set to grub-bhyve and the os set to custom. The following grub.conf got me to boot the iso correctly:

set root=(cd0,msdos1)
linux /boot/vmlinuz-hardened modules=loop,squashfs,sd-mod,usb-storage quiet nomodeset
initrd /boot/initramfs-hardened
boot

One note about this is that it appears you must do the "set root=" part. I first tried to prepend the (cdX,msdosY) of your Alpine installer ISO and boot, but I got script errors that seemed to prevent me from doing a sys install with LVM enabled. I'm new to both Alpine and Bhyve/Iohyve, but I suspect this is an Alpine quirk.

After doing a sys install with LVM enabled, I was able to boot to the new install with the following grub.conf:

set root=(hd0,msdos1)
linux /vmlinuz-hardened root=/dev/vg0/lv_root modules=sd-mod,usb-storage,ext4 nomodeset quiet rootfstype=ext4
initrd /initramfs-hardened
boot

Thanks for all your work on iohyve. 😃