I see error:
[#2] [2013-06-18 20:28:05.226 'App' 4436 error] [imageProcessingTaskImpl,536] BlockLevelVolumeCloning::task{9}: Image processing task has failed with PlatformError fault: 1117
which is "The request could not be performed because of an I/O device error."
You may need to restart services (or computer)... or just repeat the conversion because there is another error:
"[#2] [2013-06-18 20:28:07.039 'managedImportDestination' 4436 info] Error on logout (ignored): vim.fault.NotAuthenticated"
There could be some network drop. this will explain the behaviour of the Converter.
HTH