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Fixed, I think I got the advice to set the boot flag under "Options - Hardware - Boot Order" to "video.no_depth_load=1", and it appears to fix...
Problem report created. I performed the same operation again and created problem report 22766709.
I have the same problem. The VM dies when I try to run a java based application. The problem does not exist for Parallels 7. Windows 7 32 or 64...