Seems like this issue with VDR and Windows 2008 R2 has been discussed here for ages, and still there is no obvious solutions.
In my case I had to solve two issues: first was an error in Windows Event log about generic floppy drive - this one was resolved by disabling floppy drive in VM's bios. However, I still had the same error -3960, but I couldn't see any errors in event logs anymore. What I noticed was when I used "vssadmin list writers" comnand after each failed attempt ASR Writer was in FAILED state for a while. Later on I found KB 1031200 which explained how I can disable particular VSS Writer and therefore I have disabled ASR Writer to run while VDR makes quiesced snapshot.
And now I wonder - how importnat this ASR Writer for restore? what exactly did I impact by disabling it during backup?
Thanks?