I resolved this same issue when converting a Windows 7 machine by doing the following
1. Deselect the system partition at the time of conversion, it will fail at 93-98%
2. Boot the VM with an ISO image of the Windows Build that the OS is using
3. Get into Repair options from the ISO and open the Command Prompt.
4. Create a 100mb partition on the OS drive ( need to have some free space available) I used the following commands to do it in my case the OS disk was disk 0 and the new partition it created for system was partition 2, please verify this before running those commands
Select Disk 0
Create Partition Primary Size=100
Select Partition 2
Format fs=ntfs label="System" Quick
Active
5. I ran the following commands at the command prompt
BootRec.exe /fixmbr
bootrec.exe /FixBoot
bootrec /ScanOs
bootrec /RebuildBcd.
5. Reboot into the CD ISO and run Startup Repair again. This time it may scan and detect your OS this time and do it automatically. (Note I had to do this twice for some reason)
6. Reboot into the VM and try to boot into the guest, you should get a BSD (blue screen of death)
7. IF you get the BSD do the following
a. Boot the virtual machine from the Windows 2008 ISO.
b. Load the Recovery Console and open a command prompt.
c. Enter regedit in the command prompt. The Registry Editor window opens.
d. Click HKEY_LOCAL_MACHINE (HKLM) and then click Menu> File> Load Hive.
e. Browse to C:\Windows\system32\config and select the file SYSTEM.
f. When prompted for a name enter p2v.
g. Locate the key HKLM\p2v\ControlSet001\services\LSI_SAS.
h. Set the value of the start type to REG_DWORD 0.
i. Select HKLM\p2vand click Menu > File > Unload Hive.
j. Close Registry Editor and restart the virtual machine.
8. Reboot into the guest and it should come up
I hope this helps someone!