Hi Brandon (and anyone else who read this thread but didn't have an answer)
I spoke with support on this and it turns out that this issue is caused by a bug in SMHV where the VM Snapshot path and Configuration file path (in HyperV) must contain a trailing backslash or this problem occurs. Here is the bug report:
Pretty silly bug, but it caused me (and I'm sure others) many headaches. After reading the bug report, and learning what caused this, everything made perfect sense. I had previously done a HyperV storage migration to move some VMs between NetApp volumes, and when I did this, HyperV didn't put the trailing backslashes in the paths mentioned. Immediately afterward, the backups started failing, and that is also why when I only selected certain VMs to backup the backup was successful
The resolution for me was to upgrade to the latest builds of SD and SMHV (7.0.2P2 and 2.0.2P1, respectively). Those versions had the fix and after the upgrade, all VMs back up successfully.
Anyway, case closed, so I figured I'd share in case someone else has a similar problem and can't find anything on it.