My first take on this is that your Parallels installation is somehow corrupted. You can easily uninstall Parallels and reinstall Parallels without losing your configuration settings or deleting your Virtual Machine image. That said, I have no idea of your level of confidence and would strongly recommend that you backup before proceeding with this. I would be very surprised if this did not fix your problem. I have never looked for an iso file in connection with Parallels 8 or 9. I just did so and did not find one on my machine either. Best wishes for success in getting this fixed!