In migrations of Virtual Machines, this scenario may happen. You may have created a VHD using a P2V utility, and go to boot the VM. The VM fails to start, often with the message above.
Microsoft have release a KB article on this here – http://support.microsoft.com/default.aspx?scid=kb;en-US;2249906
This is caused by incorrect permissions on the VHD. The resolution is as follows:
- Note the Virtual Machine SID
- Using icacls in an elevated prompt, type icacls [VHD file] /grant “NT VIRTUAL MACHINE\[VM SID]”:F
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