VSSADMIN: unable to create a shadow copy

I have Backup Exec 2010 R3, ver 13.0 Rev. 5204 (32bit) and have been unable to perform a backup for about 3 weeks now due to the following error in Event Viewer:

VSSADMIN: unable to create a shadow copy: Insufficient storage available to create either the shadow copy storage file or other shadow copy data.

So far I have increased the vss volume size to about 3gb from 2gb, rebooted multiple times to make sure all vsswriters are showing as stable, deleted tmp folder content, defragged HD, run updates for Backup Exec 2010 R3 and all to no avail.  I would appreciate some assistance on this problem since this is a business software.

Thanks