Fatal error C0000034 starting Windows 7 virtual machine

Symptoms

You receive the following error message starting you Windows 7 virtual machine:
 

Fatal Error C0000034 applying update operation

Cause

Incorrect registry binary value.

Resolution

1. Start Windows virtual machine and reboot it. After reboot  run System Repair.
2. In the System Repair environment, cancel the automatic repair process, and launch Command prompt.
3. Type 

reg load HKLM\fix C:\Windows\system32\config\system

4. Launch Registry Editor and navigate to HKEY_LOCAL_MACHINE\fix hive.
5. Located the following services in ControlSet1 and ControlSet2:
 

atapi
intelide
msahci

6. Edit the binary value for "Start" key by setting it to "0".