This is a little older of a thread, but I've just started using VMware and the converter.
I've used two versions to date. 5.1, and 5.5.
This issues does not seem to happen with 5.1, but does happen with 5.5. It doesn't matter if the server is Linux, or Windows.
Running as Admin does not help.
So, consider this scenario.
1. Install converter. Convert machine. Works.
2. Restart converter.
Error from original poster occurs "Permission to perform this operation was denied."
3. Nothing seems to resolve this error.
4. Uninstall converter.
5. Go to step 1.