The error you're seeing is usually propogated from Windows. It basically means that there was too much I/O going on at the time VSS was invoked. Is it possible the VM is doing something at the time you're trying to backup that's different when you attempt to create a manual snapshot?
A) I don't think this whole 'blaming it on Windows thing' flies has any relevance, for one thing I have done this on VM's that ARE busy. So why do they succeed, hmmmm?
B) Snapshots are an ESX thing NOT a Windows thing, and snapshots work (guest OS is OFF for example) regardless of the state of the guest.
So in the end, I don't know where this information is from but it's NOT accurate. I/O state of the VM makes ZERO difference, since the snapshot needs no such confirmation from the guest OS or to get approval to proceed from that same guest OS, therefore I claim this "usually propogated from Windows." as bunk!
Not real nor is it accurate, and show me the source, because that is counter to how snapshots work.
Another thing is to look in the Event Viewer in Windows and see if there are any VSS-related messages/errors in there.
There are no such correlating events for a snapshot, and in fact Windows is clueless as to the snapshot even taking place.