I'm still troubleshooting the my oVirt 4.1.8 cluster and idea came to my mind that I have an issue with storage settings for hosted_engine storage domain. 

But in general if I have a 2 ovirt nodes running gluster + 3rd host as arbiter, how the settings should looks like? 

lets say I have a 3 nodes: 
ovirt1.domain.com (gluster + ovirt)
ovirt2.domain.com (gluster + ovirt)
ovirt3.domain.com (gluster)

How the correct storage domain config should looks like? 

Option 1:
 /etc/ovirt-hosted-engine/hosted-engine.conf
.... 
storage=ovirt1.domain.com:/engine
mnt_options=backup-volfile-servers=ovirt2.domain.com:ovirt3.domain.com

Option 2:
 /etc/ovirt-hosted-engine/hosted-engine.conf
.... 
storage=localhost:/engine
mnt_options=backup-volfile-servers=ovirt1.domain.com:ovirt2.domain.com:ovirt3.domain.com

Option 3:
Setup a DNS record gluster.domain.com pointing to IP addresses of gluster nodes

 /etc/ovirt-hosted-engine/hosted-engine.conf
.... 
storage=gluster.domain.com:/engine
mnt_options=

Of course its related not only to hosted engine domain, but to all gluster based storage domains.

Thank you in advance!
Regards,
Artem