Error message "Hdd file is missing, corrupted, or used by other application" or "Unable to connect to Hard disk 1"appears upon virtual machine startup.
Virtual Hard Disk of current virtual machine can be missing, corrupted or in use by Parallels Mounter.
1.Missing Virtual Hard Disk.
Please check if virtual Hard Disk is present in the .pvm bundle of the virtual machine. Open the following location in Finder:
/User/Documents/Parallels/Windows XP.pvm (virtual machine name can be different)
Right click the .pvm file and choose "Show package content". In this bundle you should see the .hdd file, please refer to the screenshot below:
Please open virtual machine Configuration windows from Virtual Machine menu > Configure > Hardware > Hard Disk 1 and check if the path to the virtual hard disk is correct.
2.Corrupted Virtual Hard Disk.
In order to recover corrupted Hard Disk please refer to the corresponding KB article below:
Repair the installation of Windows XP in Virtual Machine both ordinary and Boot Camp based: 5138
How to repair Windows Vista/7 installation in a VM in both normal and Boot Camp Windows VMs: 5223
3.Virtual Hard Disk is used by another application.
In this case virtual hard disk is most probably used by Parallels Mounter application. Please check if the disk C of virtual machine is mounted to your Finder:
In case if it is mounted, right click the disk C and choose "Eject". After that you can start your virtual machine.