Backup aborted! - Failed to create volume snapshot error. Result Code: 0x8004230F
The windows snapshot component VSS will fail if a disk with a non standard sector size is attached to your system, even if this disk is either being backed up or used to store the image files. This can be an internal disk or one connected by USB or eSata. These disks are fortunately rare, and are typically found only in sizes of 1TB or above.
The extended VSS error information will be reported as below. Note the result code may be different, but the extended error will always be: ERROR: COM call "m_pVssObject->BackupComplete(&pAsync)" failed. - Returned HRESULT = 0x80042301 - Error text: VSS_E_BAD_STATE
Run 'System Information' ('All Programs' > 'Accessories' > 'System Tools' > 'System Information'). Expand the Components->Storage->Disks node, and scroll down the list of disks, looking for any that have a Bytes/Sector value not equal to 512.
Unfortunately, until Microsoft fix this issue, the only option is to remove this disk from your system. Read this Article for general information regarding Microsoft support for non-standard sector sizes. Note: Some Western Digital disks can be formatted for "Windows Vista Compatibility" using the supplied software. This enables 512e in the firmware and adds support for VSS.
Update: Whilst Microsoft's official position remains that disks with non-standard sector sizes are not supported, there is a workaround for Windows Server Operating Systems using a command line tool called VSSAdmin. If you run the following command for each of your attached drives (replace C: with each drive letter) then you may be able to successfully use VSS with a non-standard sector size disk attached: vssadmin add shadowstorage /For=C: /On=C: /MaxSize=UNBOUNDEDNote this command should not be run unless you understand the implications for your system, please see here for the official documentation: http://technet.microsoft.com/en-us/library/cc788051.aspx