Edit: I was able to work around this. From what I've read, a bare metal restore from a physical to virtual machine is not supported, but that's what I tried and it worked beautifully. The only thing that went right today.
So, disk2vhd isn't needed (and as we've seen, didn't work). Instead I took these steps:
1. Control Panel -> File History. After it finishes searching for drives, at the bottom left of the page is a link to System Image Backup. Run it, and select a target drive for the backup. I used a 64Gb key drive. Next, it will
show you the volumes that will be backed up. It automatically selects (and you cannot deselect) the volumes required for a bare metal restore. Any additional volumes are optional. You'll probably want to deselect the target drive for the
backup.
2. After the backup is complete, either move the drive over to the Hyper-V host or access it over the network.
3. In Hyper-V Manager, create a VHDX virtual disk from the backup drive. Then create a blank VHDX that is at least the size of the original machine's system disk (which may have multiple volumes). In my case, this was a 2Tb disk, to which I added
an extra 128Gb just to be sure. This isn't the size of the image backup, it's the size of the disk from which the image backup was taken. I made my disks fixed size. I don't know if it would work otherwise.
4. Create a Gen 2 virtual machine (this was necessary for me since my original machine used EFI boot). On the SCSI host adapter, attach the blank disk that will take the image restore, and attach a second disk containing the image backup (this can
be deleted later).
5. Create a second SCSI host adapter and attach a DVD drive to it (also may be deleted later). Not sure if you really need the second adapter but I was just being cautious. Assign the ISO image for your original machine's install disc (Windows
8.1 Pro Update 1, in my case) to the DVD. Set the DVD to boot.
6. Run the VM and press a key when prompted to run from the DVD. Select the Repair option, and drill down until you get to a page with the option for a System Image Restore. Click on that and then select the drive containing your backup when
prompted. It will inform you that drive C: (your blank drive) will be wiped out and resized to match the original system drive that was backed up. Then let it run. In my case it took maybe three or four minutes, but it was a very sparsely
populated 2Tb drive.
7. After the restore completes, you should be good to go. After testing the new VM, I deleted the second SCSI disk with the backup image, as well as the DVD and its host adapter.
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I ran disk2vhd on a recently built Windows 8.1 x64 machine. The conversion completed successfully, but I'm having no luck finding the right recipe to booting it in Hyper-V on a Server 2012 R2 machine. I've tried both Gen 1 and Gen 2 (with and
without Secure Boot enabled). In both cases it apparently fails to find a boot loader. The virtual disk is VHDX.
I ran disk2vhd twice. Once including the additional volumes Windows creates for EFI, and once without. The result is the same either way.
Any help much appreciated.