Running Parallels 11.1.3 on OS X 10.11.3 Trying to create a new Windows 7 VM from a bootable USB thumb drive. Parallels is able to auto detect Windows 7 on the USB drive (see attached screenshot) However I am unable to install. See error messages in screenshot. I've even tried moving External USB storage device to be the first bootable device. This USB drive has been used many times before to install Windows 7 on vanilla PC's. It was prepped using Microsoft's bootable USB thumb drive tool, loaded with an image of Windows 7.
MarcusD2, you are doing all things right It seems that the problem on parallels side, because of error message shown: "Ehci transfer timeout!". I see that you are using a really working bootable thumb drive, but could you try another flash? Also, do you want to install 32 or 64 bit Windows? If your Windows is 64bit you can try to create VM using UEFI BIOS. There should be a special check box in VM configuration editor.
I didn't actually resolve the issue, but I downloaded an ISO of Windows 7 and just used that ISO from my desktop to install the new VM in parallels. I suspect this would have worked just as well had I moved the ISO to a USB drive and attempted installing from there. If I had to guess, the issue is due to it being a bootable USB thumb drive, not just an image of the OS by itself on the thumb drive. So I'm up and running now, but I'd still be interested in knowing what the issue as with the method I tried initially.
The issue at USB emulation on VM side. Parallels was unable to read from your thumb drive in a certain moment of time.
MarcusDiddle, The USB device is recognized as a bootable USB once you check the option 'Select Boot device on Startup' in Actions > Configure > Boot Order (as per your second screenshot)
