microsoft/iis - A device attached to the system is not functioning

I am trying to use containers in azure so I provisioned a "Server 2016 - with containers" VM. After doing docker pull microsoft/iis, I start one up like this docker run -it microsoft/iis powershell and execute this command:

Test-Connection -ComputerName $env:COMPUTERNAME

This is what I get:

A device attached to the system is not functioning. (Exception from HRESULT: 0x8007001F)

Using different code like Get-NetIPAddress or (Get-WmiObject -Class Win32_NetworkAdapterConfiguration -Filter 'IPEnabled = True') yields the same error. This was working without issues for quite a while.

I provisioned another container host in azure, and it gives the same error. However, if I pull down the container and run it on my Windows 10 laptop, it works. How can I fix this error?

UPDATE: If I pull down mcr.microsoft.com/windows/servercore/iis:windowsservercore-ltsc2016, the command completes successfully. However, somewhere in my build process, something breaks and the final container won't finish the command successfully. After that, even if I delete all the images and download the above mentioned tag fresh, it still won't complete the command without errors.

The issue appears to be my use of the "graph" setting in daemon.json. I created a premium storage managed disk, and added

"graph":"F:\\docker"

to my daemon.json. After some period of time, something breaks and everything fails with the error mentioned above. Removing that line has (for the moment) caused things to work again. I wonder if it has something to do with forcing the container to pull the 3889bb8d808b layer. This layer comes with the VM on the C:\ drive but moving the data-root to F:\ causes it to be pulled again.