OK, from the logs I see the following:
DISKLIB-DSCPTR: DescriptorDetermineType: failed to open 'C:\Windows\TEMP\vmware-temp\vmware-Remco-1000\cbktrsdoznrweiwo\Dyna-Tech - Microsoft Windows Small Business.vmdk': Could not find the file (63)
DISKLIB-LINK : "C:\Windows\TEMP\vmware-temp\vmware-Remco-1000\cbktrsdoznrweiwo\Dyna-Tech - Microsoft Windows Small Business.vmdk" : failed to open (The system cannot find the file specified).
DISKLIB-CHAIN : "C:\Windows\TEMP\vmware-temp\vmware-Remco-1000\cbktrsdoznrweiwo\Dyna-Tech - Microsoft Windows Small Business.vmdk" : failed to open (The system cannot find the file specified).
DISKLIB-LIB : Failed to open 'C:\Windows\TEMP\vmware-temp\vmware-Remco-1000\cbktrsdoznrweiwo\Dyna-Tech - Microsoft Windows Small Business.vmdk' with flags 0xe (The system cannot find the file specified).
Failed to open source disk C:\Windows\TEMP\vmware-temp\vmware-Remco-1000\cbktrsdoznrweiwo\Dyna-Tech - Microsoft Windows Small Business.vmdk with error 25 (The system cannot find the file specified)
Failed to estimate the time to complete a hosted-to-managed disk-cloning operation. Disklib unable to open virtual disk file
ConvertTask updates, state: 1, percentage: 0, xfer rate (Bps): <unknown>
DISKLIB-DSCPTR: DescriptorDetermineType: failed to open 'C:\Windows\TEMP\vmware-temp\vmware-Remco-1000\cbktrsdoznrweiwo\Dyna-Tech - Microsoft Windows Small Business.vmdk': Could not find the file (63)
DISKLIB-LINK : "C:\Windows\TEMP\vmware-temp\vmware-Remco-1000\cbktrsdoznrweiwo\Dyna-Tech - Microsoft Windows Small Business.vmdk" : failed to open (The system cannot find the file specified).
DISKLIB-CHAIN : "C:\Windows\TEMP\vmware-temp\vmware-Remco-1000\cbktrsdoznrweiwo\Dyna-Tech - Microsoft Windows Small Business.vmdk" : failed to open (The system cannot find the file specified).
DISKLIB-LIB : Failed to open 'C:\Windows\TEMP\vmware-temp\vmware-Remco-1000\cbktrsdoznrweiwo\Dyna-Tech - Microsoft Windows Small Business.vmdk' with flags 0xe (The system cannot find the file specified).
Failed to open source disk C:\Windows\TEMP\vmware-temp\vmware-Remco-1000\cbktrsdoznrweiwo\Dyna-Tech - Microsoft Windows Small Business.vmdk with error 25 (The system cannot find the file specified)
Failed to estimate the time to complete a hosted-to-managed disk-cloning operation. Disklib unable to open virtual disk file
RecordOp ASSIGN: info, task-1
HTTP Response: Complete (processed 1078 bytes)
User agent is 'VMware-client/4.0.0'
HTTP Response: Client: NeedsContentLength: false UnderstandsChunking: true CanKeepAlive: true (PresetContentLength -1)
RecordOp ADD: event[0], task-1
Converter Task GetEvent(taskID=task-1)
HTTP Response: Complete (processed 982 bytes)
User agent is 'VMware-client/4.0.0'
HTTP Response: Client: NeedsContentLength: false UnderstandsChunking: true CanKeepAlive: true (PresetContentLength -1)
Unknown exception
TaskImpl has failed with MethodFault::Exception: converter.fault.OvaExtractionFault
ConvertTask updates, state: 4, percentage: 0, xfer rate (Bps): <unknown>
RecordOp ASSIGN: info, task-1
Task failed:
As you can see, it is having trouble extracting the vmdk files. Looks like the OVA might be corrupt...as the conversion is taking place check the temp directory listed above and see what vmdk files are listed.