P2V failing with Error 2940 0x80072eed

I successfully complated the P2V online but when I try to do a P2V Off line I get error.

I run the Physical-to-Virtual (P2V) converter to convert the Server 2003 server. it runs to about 59% completion then fails and reports the following error:

 Error (2940)
  VMM is unable to complete the requested file transfer. The connection to the HTTP server server.domain.com could not be established.
  Unknown error (0x80072ee2)

 Recommended Action
  Ensure that the HTTP service and/or the agent on the machine server.domain.com are installed and running and that a firewall is not blocking HTTP/HTTPS traffic on the configured port.

On my Hyper-V host or guest WinHttp is srarted and BITS already started.