I had this exact issue on a windows 7 32-bit physical machine doing a PtoV. Sadly the /3 GB switch was not set on the physical machine so that fix did not apply.
Later after trying various permutations and combinations I found that when I reduced the CPU count on the target to 1 it failed at a different place which led me to this other KB:
This new KB glibly says in step 6 to "Click the command prompt" but at that stage there was no command prompt to be found. Instead at that point you are presented with a system recovery options dialog with two choices:
- User recovery tools that can help fix ...
- Restore your computer using a system image ...
plus a Load Drivers button.
This had me frustrated and baffled for a while until I found how to get to the command prompt:
If you choose the second choice "Restore your computer using a system image ..." it will return a dialog about not being able to find a system image.
Cancelling out of that takes you to a 'Select a System Image Backup' dialog and then cancelling out of that takes you to a System Recover Options dialog with 5 choices, the last being the sought after Command Prompt.
Now in my case the first portion of the new KB cure (BCDEDIT boot options) was already set correctly but the second part, running regedit, loading the target system hive and editing the HKLM\p2v\ControlSet001\services\LSI_SAS\start which I found initially set to 3 and changed to 0 per the KB.
Rebooting without the install image then took me to the failed start screen but instead of choosing repair at that stage I chose 'start windows normally' and voila! it started and ran normally just as it had on the original physical machine.