Mounting VMware virtual machine for file-level backup fails with "internal error" (4047159)

Date: Apr 2011
Affected NV Version: All
OS Version: Windows
Plugin version: VMware 2.0 and higher
Application version: All ESX and ESXi

Symptoms:
When right-clicking on a virtual machine to mount it, the GUI reports "Internal error" when trying to expand. Alternatively, when trying to run a file-level backup, the backup fails and the log context reveals "VDDK error message is 'Driver not found'"

This is an issue with the VMware Virtual Mount Manager Extended Service and its driver on Windows that are invoked by the VMware Plugin to perform the mount. VMware has the issue documented in their KB article 1014358 and suggests the following:
----------------------
These issues may be the result of a number of different issues. To resolve the issues, try each of these troubleshooting steps:
Reboot the VCB Proxy server.

Note: This action may allow file level backups to work once before failing again.

Set the VMware Virtual Mount Manager Extended Service to login as a user with Local System permissions.
Uninstall any VMware products that are installed on the <...> host, such as VMware Converter.
<...>