Issue:

When trying to migrate a VM’s storage to a local device using SCVMM you could see this:

Error (12700)
VMM cannot complete the host operation on the HOST server because of the error: Storage migration for virtual machine ‘VM’ (GUID) failed with error ‘The device is not ready.’ (0x80070015).

Operation not allowed for virtual machine ‘VM’ because Hyper-V state is yet to be initialized from the virtual machine configuration. Try again in a few minutes.(Virtual machine ID )
Unknown error (0x800c)

When trying to migrate a VM’s storage to a local device using Hyper-V manager you could see this:

"Storage migration for virtual machine"HOST’ failed.
Operation not allowed because the replication state is not initialized.
Storage migration for virtual machine "HOST’ failed with error ‘The device is not ready’ (0x80070015)."

Solution:

So far the only solution I have found, tried (and it did work) is to restart the Hyper-V management service.

http://social.technet.microsoft.com/Forums/systemcenter/en-US/eb4511c5-23f9-4c1e-af32-88de0eeaaef1/vhdx-failed-to-migrate-to-local-storage?forum=virtualmachingmgrhyperv