Earlier this week I had spent far too long trying to get an old server 2003 box converted to a VM. It would succeed in creating the vm, block copying the volumes, and all the rest, but fail at the very end at 98% with a cryptic” FAILED: Unable to create ‘\\.\vstor2-mntapi20-shared\$Reconfig$’.”. After much hunting, and tweaking just about every converter setting I could find, I found the simple and quick fix: remove the /3gb option from the boot.ini file.
The easiest way to do this is just open the C:\boot.ini file in notepad, remove the /3gb flag, save it, and then reboot. On your next p2v conversion it should pass with flying colors, good luck!
Note: the VM itself may also fail to boot with a bluescreen reading stop: 0x0000007B, the same fix above works for this as well.