So basically, I already had a clue by just looking the error message that this has something to do with the NTFS permissions. So here's what I did to solve this.
1. Go to the root drive and go to the NTFS Permissions tab
3. Then add in the "Authenticated Users" group and make sure that it has the "List folder contents & read" permission. Then click "Apply" and "OK" for the changes to take effect.
4. Then go back to your Hyper V console and try creating a new virtual machine again and see your VM live in action.
VM for Windows Server 2008 R2
VM for Windows Server 2012
Still having problems creating VMs on your Hyper V server? Leave a comment and I'll get back at you. :)