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I fixed it by rebuilding kernel caches. I had to make a few attempts at it too. First I tried it from recovery and that didn't work. Then I tried...
That is a completely different problem. For one, it is a different version of Parallels Desktop. For another, it is a different version of macOS...
I just upgraded to Parallels Desktop 1.6. It will not boot my Mavericks VM. Everything else works. I can even boot into 10.8 and upgrade that....