Virtail Machine Deploy Fails

Very simple configuration in an otherwise empty Resource Group fails with this error:

{"code":"DeploymentFailed","message":"At least one resource deployment operation failed. Please list deployment operations for details. Please see https://aka.ms/DeployOperations for usage details.","details":[{"code":"Conflict","message":"{\r\n \"status\": \"Failed\",\r\n \"error\": {\r\n \"code\": \"ResourceDeploymentFailure\",\r\n \"message\": \"The resource operation completed with terminal provisioning state 'Failed'.\",\r\n \"details\": [\r\n {\r\n \"code\": \"DiskServiceInternalError\",\r\n \"message\": \"An unexpected error occurred while processing disk. Please retry later. Target: '/subscriptions/13dd5309-285f-4757-ae14-f8943a079aea/resourceGroups/RGCloudVolumes/providers/Microsoft.Compute/disks/VMTestVolumes_disk1_838de577c4a443fa9d40a1aa23f72250'.\"\r\n }\r\n ]\r\n }\r\n}"}]}

Not much to go on. No idea what the "conflict" might be.

This is a Windows 2016 server VM, all the defaults deployed from the GUI.

The report provides no repository file, template, or test to start from. Begin with the Azure deployment operations linked in the report and reproduce the default Windows Server 2016 VM deployment to inspect the DiskServiceInternalError details. Done means identifying a reproducible cause and documenting or fixing the deployment failure.

Written by the indexing model from the issue text.