I have created a ticket (listed above).
I have a server 2012 Hyper-V host along with a 2008R2 hyper-v Host.
I am using 2008R2 hyper-v host as Veeam server as well.
I have guest machines failing on during backup with same error (check guest OS VSS state and integration tools)
I have made sure that integration tools are up to date on all guest machines and restarted them.
Also went into each server to make sure there are no VSS errors in event logs and when i did find some I fixed them.
I still have a Domain controller 2008R2 on hyper-v 2008r2 which is still failing.
I have got an email from one of your techs but my support only covers during business hour support and as you know most of the times it is hard to restart servers during normal business hours.
Any other ideas why this might be happening.
Also to mention that everything was working perfectly up to the point we upgraded this client from 6.5 to 7.0.