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When trying to convert a physical to virtual machine using VMware vCenter Convertor, the process fails.

The error response is "FAILED: Insufficient space on the source to store VSS snapshots or the source does not have any NTFS volumes.  Error code: 2147754783 (0x8004231F).

The source is a Windows 2003 server.  Drives are all NTFS:
c: 11.7GB with 4.74G free
d: 50.2GB with 27.4GB free
e: 136GB with 43.9GB free
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I have downloaded the latest convertor for VMWARE (4.0.1 build 161434 ) and installed this on the e: drive.  Still get the same response.
The physical host is an MS Exchange server.  I have tried to P2V with all exchange services stopped.  Still get the same failure.  The problem seem to relate to the Exchange VSS Writer failing: Error code 0x50d when preparing for backup.
Even attempting a P2V after a server reboot when no other VSS backups could be running still fails.
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