I have a very similar problem to this one where the class loader can't find cfg.xml even when it is in the correct classpath. See "Jboss classpath issue hibernate.cfg.xml not found" April 11 8.28am.
I read r1ch's post and added -verbose:class to the JVM when starting Jboss, purely for debugging. Not only did this jvm option provide class loader debug info, but it fixed the whole class loader / classpath issue. I have been having major trouble with this for a week, as have others on the web. It now looks like this is caused by the JVM or Jboss not providing correct classpath info to hibernate when it loads resources.
Code:
see net.sf.hibernate.cfg.Configuration. getConfigurationInputStream ()
see also java.lang.ClassLoader. getResourceAsStream(String name) ..
Thanks r1ch.