I've heard of this from previous hosts but no I haven't thought about it yet. I noticed that the Converter Agent installed successfully on this server that I want to virtualize and convert, so I know the process is working it's just not getting past a certain point.
I see in the task list that it actually creates the VM successfully then when it cannot continue after a few minutes it rolls back and deletes the VM that was created and I'm back to square one...at bit odd.
I did think about the possibility of doing a cold clone by booting to the CD but that's not ideal due to down time involved and the fact that I would have to get an older version of the Converter since I'm currently running v4.2 and it's not capable of cold cloning due to no CD availablity.
I'm going to call VMware support to see what they say about this scenario and see if they can help me understand the logs and see what the problem is because it may not be DC related.