Failed to deploy template: The virtual disk is either corrupted or not a supported format
March 12th, 2008 | 
Author: updated 03.13.08 – Unfortunately I declared victory too soon on this issue. I got a status update this week and the customer can deploy from template in some scenarios but is still getting the same error at times. The HP SIM agents are still turned off and have not been ruled out as part of the problem, but IBM has provided a recommended design and they have made the changes.
As Brian points out in his comment the customer has a multiple IBM SVC design in front of multiple storage devices.
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Last week I helped a customer resolve an issue where whenever they deployed a new VM from a template the job would fail with the error “Failed to deploy template: The virtual disk is either corrupted or not a supported format” We were troubleshooting numerous ESX servers and the problem was the same on all the hosts. The template was fine. We changed it back to a VM and turned it on without issue. The vmtools and virtual hardware were up to date.
Surprisingly the Virtual Center error message was not well indexed on Google. I was scratching my head until I stumbled across the VMware Communities thread
Creating server from template fails …. Turns out that they were running HP SIM agents on the Service Console of all the ESX hosts, and as soon as we turned the SIM agents off we were able to successfully deploy templates again. As of this writing I do not have an official resolution from HP for the customer
The VMware forum thread also links to a HP forum thread about additional issues with HP VMM (SIM is included) causing VMs to be powered off after they are backed up by VCB. One of the replies in the HP forum hints that the HP agents on the console are locking the storage resources, and that the issue has been surfacing as various different problems for about a year. The last entry in the HP forum (Feb 13, 2008) is a reply from an admin who just updated to HPSIM 5.2 and VMM 3.1 but that issues still remain.
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