Windows 8 VM stuck on desktop view with only blue bar at bottom

I can boot up the windows 8 vm and it restarts fine, lets me log in. however, after completing login, it gets stuck on desktop which shows only a blue bar at the bottom. (see the screenshot) i can't navigate away from it. this happens in both modality or coherence mode. this was working fine on mac book air 13" 2012 running osx 10.8.4 before latest update. last parallels update was june 17th the version number is 8.0.18494

is this a known issue? is this being fixed? any workaround or resolution?