VMWare KB 1004667 addresses a different scenario than below.
This error can also occur if a VM has issues w/ the vmxf file as evidenced by digging into the hostd.log file. What’s interesting, the VM can be fully functional, vMotion’d, and not show a single error in vCenter. Once you dig to find a VM is causing the issue, vMotion’ing this VM to another host, the new host begins having issues applying DRS settings.
Unable to apply DRS resource settings on host (Reason: A general system error occurred: Invalid Fault). This can significantly reduce the effectiveness of DRS.
Hostd.log (/var/log/vmware/hostd.log) contains messages similar to:
[2010-03-22 15:13:05.285 F5CA0B90 info 'Libs'] Vix: [18420 foundryFile.c:2109]: FoundryFile_Save: Failed to open file /vmfs/volumes/volumeID/vmname/vmname.vmxf
[2010-03-22 15:13:05.285 F5CA0B90 info 'Libs'] Vix: [18420 foundryFile.c:2130]: FoundryFile_Save: Failed to close file /vmfs/volumes/volumeID/vmname/vmname.vmxf, Bad file descriptor
[2010-03-22 15:13:05.285 F646DB90 info 'Vmsvc'] SaveWorkingCopy: Error: (4) A file was not found
[2010-03-22 15:13:05.285 F646DB90 info 'vm:/vmfs/volumes/volumeID/vmname/vmname.vmx'] Failed to update resource config: vim.fault.FileNotFound
[2010-03-22 15:13:05.290 F646DB90 info 'App'] AdapterServer caught exception: vim.fault.FileNotFound
Once the VM causing issues is identified, I noticed that the vmware.log file was growing incessantly. This is what I found in it:
Mar 19 03:41:31.166: vmx| TOOLS received request in VMX to set option 'synctime' -> '0'
Mar 19 03:41:31.171: vmx| VMXVmdb_LoadRawConfig: Loading raw config
Then repeat about thousands of times. Short answer, in my case, was to upgrade the tools and reboot the VM.