Hyper V Create Virtual Machine Operation Failed

Solution 1:

Posible here is a solutuion - https://social.technet.microsoft.com/Forums/en-US/b810795c-a078-49a8-b584-9ac1e1b896d1/hyperv-failed-to-create-a-new-virtual-machine-a-required-privilege-is-not-held-by-the-client?forum=winserverhyperv

If you change the default setting for “Create Symbolic Link” on a Hyper-V Server you can get this error. This is due to the Virtual machines needing this right in order to link to the VHA storage areas. By default, when you install the Hyper-V role, a special group called "virtual machines" is created and given the “Create Symbolic Link” right. If you change this right with say a GPO (following a misguided STIG maybe?) you will not be able to create virtual machines and will get the above error. This group contains all the virtual machine Service SIDs.

Look here for more info; http://www.virtualizationadmin.com/articles-tutorials/microsoft-hyper-v-articles/storage-management/hyper-v-file-storage-permissions.html Check your restrictive policies GPO for this setting.

Solution 2:

Another option is - https://www.reddit.com/r/HyperV/comments/56g0nq/failed_to_create_a_vm/d91mqg4

On a lark I changed the default folder for virtual hard disk files from F:\Hyper-V VMs\Virtual Hard Disks to C:\Hyper-V VMs\Virtual Hard Disks and the default folder for virtual machine configuration files from F:\Hyper-V VMs\Virtual Machines to C:\Hyper-V VMs\Virtual Machines.

After I did this I was able to create a VM. After I tested this I set the paths back to their original location on F: and tried again and was able to successfully create VM's. I'm guessing that Hyper-V was somehow confused internally.