Definitely a bug. Had the same issue and it only worked by connecting directly to an iso, and ofcourse I had to rename the .ISO to .iso for it to work with it. I guess some lame developer is doing a case sensitive comparison on the extension. The strange this though, is that if I mount that iso with MagicISO and have VC connect to it, it won't recognize it during the boot at all. Thank you guys for this.