I ran into this problem when building CentOS 6.5 VMs from a SCVMM template. During the “Customize virtual machine” step, SCVMM is trying to inject a virtual floppy disk with linuxagent.iso on it, but it fails to do so because the Linux VMM agent has to be installed for the virtual floppy disk concept to work. The strange part was that I had already installed the Linux VMM agent on my template’s VHD(x) so why was the “Customize virtual machine” step hanging? Because the Linux VMM agent uninstalls itself: [root@localhost ~]# cat /var/opt/microsoft/scvmmguestagent/log/scvmm-install.log 10/26/14 15:21:20 UTC Installing SCVMM Guest Agent to /opt/microsoft/scvmmguestagent 10/26/14 15:21:20 UTC Successfully installed SCVMM Guest Agent 10/26/14 15:27:00 UTC Current version: 18.104.22.1689 10/26/14 15:27:00 UTC Current agent version is the latest. 10/26/14 15:28:13 UTC Current version: 22.214.171.1249 10/26/14 15:28:13 UTC Current agent version is the latest. 10/26/14 15:28:23 UTC Removing SCVMM Guest Agent 10/26/14 15:28:23 UTC Disabling waagent daemon Scratch that. Instead use: https://github.com/Azure/WALinuxAgent/releases
Scratch that. Instead, when creating the template choose: [None – customization not required] which instructs SCVMM to not install a guest agent of any kind.