SBS2008 Backup fails - unknown error (0x800423f4) on sbs2008

I have got it on 2 out of the box installations and one other user says that he has it on 5 machines. I am attempting to use the wizard based backup in the Windows SBS Console. It will simply fail with "Backup unsuccessful: A Volume Shadow Copy Service operatoin failed. Unknown error (0x*00423f4)". The issue is with the SqlServerWriter and if I disable the service "SQL Server VSS Writer" then the backup completes successfully. But when it is re-enabled then the same failure again occurs. Also "vssadmin list writers" gives the following after a failure:

Writer name: 'SqlServerWriter'
Writer Id: {a65faa63-5ea8-4ebc-9dbd-a0c4db26912a}
Writer Instance Id: {4a86f412-7635-4af7-9f7f-e43d60b798ed}
State: [8] Failed
Last error: Non-retryable error

Can anyone tell me how do I fix this issue? Thanks.

Even I was facing similar issue and the solution that I found was to stop the services linked with SBS backup and re-register the dll files. This worked for sometime but the problem occured again after a reboot. So afterwards, I configured new accounts for for two services and my Sharepoint Search errors went away and also the SBS backup VSS issue.

I dont think that the sharepoint right change is messing up in your computer. Incase you do not want to modify anything before backup then you can try to stop services that has something to do with it and SQL. I havent tried it myself but you can give it a shot. If it works then just restart and then everything will be running again and the system will back up also.

Can you try to check the vsswriters by using this command vssadmin list writers in cmd and the post the output of the result here. Incase it tells you that it failed then try to register the below files:

net stop "System Event Notification Service"
net stop "COM+ Event System"
net stop "Microsoft Software Shadow Copy Provider"
net stop "Volume Shadow Copy"
cd /d %windir%\system32
net stop vss
net stop swprv
regsvr32 /s ole32.dll
regsvr32 /s oleaut32.dll
regsvr32 /s vss_ps.dll
vssvc /register
regsvr32 /s /i swprv.dll
regsvr32 /s /i eventcls.dll
regsvr32 /s es.dll
regsvr32 /s stdprov.dll
regsvr32 /s vssui.dll
regsvr32 /s msxml3.dll
net start "System Event Notification Service"
net start "COM+ Event System"
net start "Microsoft Software Shadow Copy Provider"
net start "Volume Shadow Copy"