I am using DPM 2012 SP1, but to keep things simple I ran the built-in windows 2012 system state backup and it fails. I have two 2012 servers with the exact same behavior.
My Environment:
OS=Server 2012
Virtual = Yes
Virtual Environment = Hyper-V 2012 Cluster
Command = wbadmin.exe start systemstatebackup -backuptarget:C:
NOTE: I can run a NTDSUTil AD Snapshot and it works.
System Partition = NTFS
OS Partition = NTFS
Screenshots