A: I've seen two causes for this problem when trying to perform physical-to-virtual (P2V) migration of a Windows 2003 OS to Hyper-V using System Center Virtual Machine Manager (SCVMM).
The first is that the latest Volume Shadow Copy Service (VSS) update package hasn’t been applied, which is key.
Download it at the Microsoft support website.
The second is that in the boot.ini file of the machine, the /3GB switch has been used, which is best practice for some workloads but can interfere with the conversion. Remove the /3GB switch from the boot entry in the boot.ini file, reboot, and try the P2V migration again.