Hello Me from 2009... It's you in 2013. I had this problem again.

Imagine my surprise at stumbling across me struggling with this problem over 4 years ago. I didn't remember answering this question until I saw my name in the thread. Interesting, too that the fix doesn't work in this case.

This time I have a Server 2003 VM hosted on my local Windows 7 box. (VMWare 10) All drive options are checked. The VM is isolated on a Host only network.

I think the problem this time is that my host PC is logged into a domain that the VM intentionally cannot see. I ended up working around the problem by sharing a folder on the host that the VM can see.