> I can't expand the drive since it has a snapshot. But to delete/merge the snapshot will take a very long time (2+ year old snapshot).
Merge will take long time indeed, however it depends on the size of the AVHD file(s) and not the age- over time the same blocks in the AVHD are overwritten so it shouldn't matter how old it is - just the size.
You will need free disk space however - whether for MERGE or other actions such as RESTORE.
In anycase, for the safety I suggest taking also an in guest backup (using windows server backup for example), in addition to what you already have with VeeamZip.
I suggest this before any further action, keeping the backup on different host/media (could be a PC with shared folder - for this onetime backup).