When conducting a vSphere upgrade using either the Host Update utility or Update Manager you get the following error appear on the host console.
It is first worth checking that you do have enough free space using the vdf –h command and it is worth noting that this error message does not appear on update manager or host update utility and is not visible in any logs only on the console screen.
To resolve this issue download the vSphere Client and Host Update package from vmware.com and reinstall. You should now be able to conduct your upgrade from the host update utility. I haven’t tried using update manager again.