Stop! You don't need to convert the disk to a "Dynamic Disk" to expand the volume!
Just boot a Windows 7 or Windows Server 2008 R2 setup ISO on that VM. Once you've booted the setup media open a command-prompt (Shift-F10) and use the
DISKPART tool to
EXTEND the volume.
DISKPART prompt you'd do a
list disk to list the disks in the machine, a
select disk # (where # is the ordinal for the disk containing the volume you want to extend), a
list partition to list the partitions on that disk, and a
select partition # (where # is the ordinal for the volume you want to extend). After that, enter the command
extend and the partition will be extended to fill the entire free space on the disk.
This is a pretty safe operation (I've never had a problem and I've done it a lot) but, even so, you really should have a backup before you proceed with this operation. Better safe than sorry.