@btmpI actually used Acronis True Image to make the data copy, first with the boot sector and partitions intact, and later with just data. Both failed, which tells me that the Windows 10 installer is actually reading data from the disk and then failing (instead of failing to read the disk), but it's all very fast so what could it be that it's reading? I'll try DISM next.

@loyoI've already tried all that. I started deleting and turning off stuff in order to create the most simplified version of this VM that I could, hoping to figure out the problem first and then applying the solution to a full copy of the original.  I started with setup.exe, ran msconfig.exe for minimal boot, turned off non-microsoft services and drivers, and later even went as far as deleting every non-Microsoft driver and service  in the VM followed by removing all virtualized HW except for drive, RAM, CPU and video card. I also uninstalled the Microsoft Security Essentials too, so there's really nothing left in this barebones copy of my VM except MS stuff.

The interesting thing is that I found my original Windows 7 Pro SP1 physical disk, and booted from it just fine. The installer finds the disk, finds the current Windows installation, offers to install new or repair (and succeeds), etc. Fully functional. But boot from a Windows 8.1 or 10 disk and it just shows the logo for a few seconds and then goes blank. Amazing.