You may want to look at the snapdrvdbg.log in the snapdrive installation directory. you will find a link to a kb which explains how to tackle this kind of problems.
In your case, you do need to have DNS properly configured for both the source and destination vserver name corresponding to their respective manaement lif and additionally, you need a block connection from the server where snapdrive is installed to the destination vserver.
To avoid problems creating LUNs when using SnapDrive, you must keep some rules in mind.
1. Create LUN names using US-ASCII characters only, even when you are using non-ASCII operating systems. 2. If you are adding the CSV LUN to a Windows Server 2008 or 2012 cluster, make sure to create the CSV LUN on the node that owns the cluster group in which you are creating a new physical disk resource.
1. Shared disks on Windows Server 2008 and 2012 cluster nodes that do not own the disks often display as offline in the MMC Disk Management utility; however, the disks continue to function normally on all nodes in the cluster. 2. Use the LUN path instead of the UNC path to create a LUN.
When you use the UNC path, disk creation fails with the error A device attached to the system is not functioning.