Stop! You don't need to convert the disk to a "Dynamic Disk" to expand the volume!
Just boot a Windows 7 or Windows Server 2008 R2 setup ISO on that VM. Once you've booted the setup media open a command-prompt (Shift-F10) and use the DISKPART
tool to EXTEND
the volume.
From the DISKPART
prompt you'd do a list disk
to list the disks in the machine, a select disk #
(where # is the ordinal for the disk containing the volume you want to extend), a list partition
to list the partitions on that disk, and a select partition #
(where # is the ordinal for the volume you want to extend). After that, enter the command extend
and the partition will be extended to fill the entire free space on the disk.
This is a pretty safe operation (I've never had a problem and I've done it a lot) but, even so, you really should have a backup before you proceed with this operation. Better safe than sorry.