In System Center 2012 Virtual Machine Manager, attaching an ISO file to a virtual machine may fail with the following error if the “Share image file instead of copying it” option is selected:
Error (12700) VMM cannot complete the host operation on the servername.domainname.com server because of the error: 'VMName' failed to add device 'Microsoft Virtual CD/DVD Disk'. (Virtual machine ID C6025A28-89F0-45F9-A28E-42FE334B1C87) 'VMName': The Machine Account 'DOMAINNAME\SERVERNAME$' does not have read access to file share '\\servername.domainname.com\MSSCVMMLibrary\Filename.iso'. Please add this Machine account to the file share security. Error: 'General access denied error' (0x80070005). (Virtual machine ID C6025A28-89F0-45F9-A28E-42FE334B1C87) Unknown error (0x8001)
This issue can occur if the library share permissions are incorrect or constrained delegation wasn’t configured for the Hyper-V host.