The virtual Hard Disk 1 has wrong access permissions or is used with another virtual machine

Immediately after applying the most recent Parallels 16 Desktop upgrade, I now get the following error when trying to start my VM: "The virtual Hard Disk 1 has wrong access permissions or is used with another virtual machine" error after upgrading to Parallels Desktop 16.5.1 (50696) M1.

I suspect this occurred because neither I nor the Parallels upgrade installer were vigilant enough to shut down my Windows VM before applying the update. I opened a support ticket and have been waiting for four days with no response Parallels Support. I also searched this forum, but not sure if those answers are relevant. Does anyone here have any suggestions?

I've already read and tried the solutions outlined in https://kb.parallels.com/124779 but none of them helped. Scenario 1: The PVM file was not locked. Scenario 2: I am the only user of this VM and only user of the host computer. Scenario 3: I reapplied the permissions in Terminal as specified, but this did not fix the problem.

History: This VM has been running without any problems for a couple of months now. It was fine until I upgraded to the latest version of Parallels two days ago.

Details:
Host: Mac mini (M1, 2020)
OS: macOS 11.4
Parallels: 16.5.1
PVM file location: Stored on an external TB3 SSD.
VM: Windows 11 ARM (upgraded from Windows 10 a couple weeks ago)

 

Hello,
could you collect the tech report once the issue reproduced and post the report's ID here please?

 

Hello Maria. It's great to finally hear from support. The good news is my issue was just resolved by Bhaegava (case: Parallels #2998782). He referred me to knowledge base article: https://kb.parallels.com/122983. For some reason, I was unable to find this article in my initial search efforts.