VM Essentials 9.0.0 — All cloud-init-enabled Virtual Images failed at Deploy step.

[skumar7]

Environment: VM Essentials 9.0.0, single-node HVM cluster (non-HCI, layout 1.3), local Directory Datastore.
Issue: Every Virtual Image uploaded with "Is Cloud Init Enabled" checked fails at "Deploy Virtual Machine," within ~1 second.

Failed to create server volumes: Failed to clone volume: qemu-img: Could not open
'/var/morpheus/kvm/images/<uuid>': No such file or directory

Reproduced 3 times across two different Ubuntu cloud images (24.04 and 22.04), each a freshly downloaded file uploaded as a new Virtual Image object — ruling out file corruption or a single stuck object.

However, with non-cloud images, able to successfully create VMs.