Per related question, I was having the same problem on my WHS 2011 Server (same SBS 2008 R2 foundation):
Error: The volume shadow copy operation failed with error 0x800423F0. Check event log, etc. (re: go on a wild goose chase, perhaps??? :)
I chased the event viewer and did what folks were doing to deal with the problem - amazing how many different "fixes" that worked are out there... At any rate, none helped me, to date - mainly, I checked the VSS Writer and it was started, so I came to a full stop.
It occurred to me about 30 minutes ago that this problem started happening after I installed Sharepoint (sharepoint has writers, its own backup facility, etc., so I thought, "HMMMM..."). I disabled Sharepoint (by changing all SP services to "manual" and rebooted) and now, for the first time in about 2-3 weeks, my Server is backing itself up ( at 56% whereas before it would fail within the first 5 minutes). Not sure I've "solved" the problem, but another "nugget" on the diagnosis. Something with which, I can now get some help via E-E.
Not sure where to go from here. Should I be stopping Sharepoint before backup? Seems a bit strange to have to do...
Should I be trying the fixVSS script instead?