This behavior has been seen when Microsoft Forefront Client Security is installed in the Parent partition when Hyper-V exclusions are not present.
NOTE: This behavior may also occur with other Anti-Virus solutions. Due to the different scanning mechanisms between vendors, we recommend that you consult with your Anti Virus vendor for proper configuration.
For more information, please reference the following Microsoft Knowledge Base Article:
961804 Error code when you create or start a virtual machine on a Windows Server 2008-based computer that has Hyper-V or on a Microsoft Hyper-V Server 2008-based computer: 0x800704C8, 0x80070037 or 0x800703E3