After downloading a VHD from Microsoft site and trying to import in Hyper-V environment you may observe this error. This can happen in Windows Server 2012 or above.
Looking the error message, you may feel that this VHD doesn’t support the Hyper-V version I am running. But wait!!!. I have downloaded a Windows Server 2012 R2 evaluation VHD from Microsoft and it is not working on a Hyper-V which is running on Windows Server 2012. I don’t think Microsoft will do such silly things. After debugging for sometime, I recollected a article that wrote some days back. It is about sparse flag for the files downloaded from Microsoft website.
You can read the complete article at https://techibee.com/powershell/powershell-script-to-query-folder-size/1060
So, I quickly verified and noticed that the VHD I downloaded has this sparse file set. So, removing it should solve the problem.
I made use of the Remove-SparseFlag PowerShell function which I wrote in aforementioned article and removed the flag. After that the VM started fine.
Hope this helps.