Summary:

I have a  2008 R2 SP1 server that is failing to backup the Bare Metal Recovery or System State, it has the Windows Server Backup feature and DPM agent installed, and shows an error in the event log that there is not enough space in the destination, and in DPM 2012 SP1 it displays that the "Replica is inconsistent". It is successfully backing up the system volume and the SQL databases on the server though. Any help would be greatly appreciated!

DPM Server:

2012 SP1 (Version: 4.0.1920.0) with 2TB Unallocated Disk Space

Target Server:

MS Windows 2008 R2 Standard SP1 (64-bit) using 54GB on its single partition with DPM agent and Windows Server Backup installed. No errors on the VSS writers. No pending reboot. 

DPM Protection Group Details:

Disk allocation (Replica volume: 62.5 GB allocated, 91.1 MB used | Recovery point volume: 3.67 GB allocated, 46.47 MB used). Protection Status: Replica is inconsistent. Details of Replica Path (iSCSI attached volume): 

Computer\System Protection\System State on servername.domain.pri d:\Microsoft System Center 2012\DPM\DPM\Volumes\Replica\Non VSS Datasource Writer\vol_0d783837-ad72-42a1-943e-d9498e6d5959\7f37d74c-efa6-464f-9f3d-e1da99260135\Full\C-Vol\

Modify Disk Allocation window:

Could not attach screenshot because "Body text cannot contain images or links until we are able to verify your account." and I haven't had much luck resolving that. Beside the point. :) Here is the info from the window in good ole text:

Data Source: Computer\System Protection on servername.domain.pro
Data Size: 20.00 GB
Storage Type: Storage Pool
Replica Volume: 62.5GB
Recovery Point Volume: 3.67 GB (Shrink)

Troubleshooting Steps:

I installed the Windows Server Backup feature. I tried to "Perform consistency check" and "Resume disk backups" and the error below is still what I receive.

Event Log Entry from Target Server:

Log Name:      Application
Source:        Microsoft-Windows-Backup
Date:          9/11/2013 8:44:36 AM
Event ID:      546
Task Category: None
Level:         Error
Keywords:      
User:          SYSTEM
Computer:      SERVERNAME.domain.pri
Description:
The backup operation attempted at '2013-09-11T13:44:36.644548000Z' has failed to start, error code '2155348040' (There is not enough free space on the backup storage location to back up the data.). Please review the event details for a solution, and then rerun the backup operation once the issue is resolved.
Event Xml:
<Event xmlns="http://schemas.microsoft.com/win/2004/08/events/event">
  <System>
    <Provider Name="Microsoft-Windows-Backup" Guid="{1DB28F2E-8F80-4027-8C5A-A11F7F10F62D}" />
    <EventID>546</EventID>
    <Version>0</Version>
    <Level>2</Level>
    <Task>0</Task>
    <Opcode>0</Opcode>
    <Keywords>0x8000000000000000</Keywords>
    <TimeCreated SystemTime="2013-09-11T13:44:36.644548000Z" />
    <EventRecordID>106639</EventRecordID>
    <Correlation />
    <Execution ProcessID="2912" ThreadID="4548" />
    <Channel>Application</Channel>
    <Computer>SERVERNAME.domain.pri</Computer>
    <Security UserID="S-1-5-18" />
  </System>
  <EventData>
    <Data Name="BackupTime">2013-09-11T13:44:36.644548000Z</Data>
    <Data Name="ErrorCode">2155348040</Data>
    <Data Name="ErrorMessage">%%2155348040</Data>
  </EventData>
</Event>