VSS backups failing - I just cant seem to find the solution

Here is the event error:

The backup operation that started at '‎2013‎-‎05‎-‎11T05:20:25.793000000Z' has failed because the Volume Shadow Copy Service operation to create a shadow copy of the volumes being backed up failed with following error code '2155348249'. Please review the event details for a solution, and then rerun the backup operation once the issue is resolved.

Things I have looked at:

I gave a drive letter to "System Reserved" Partition as F:

System Reserved partition is 100% full but I can not see why.

F:\>dir /a
 Volume in drive F is System Reserved
 Volume Serial Number is A87F-7A18

 Directory of F:\

10/05/2013  11:12 PM    <DIR>          $RECYCLE.BIN
05/05/2012  09:09 PM    <DIR>          Boot
20/11/2010  06:40 AM           383,786 bootmgr
05/05/2012  09:35 PM             8,192 BOOTSECT.BAK
17/03/2013  10:40 PM    <DIR>          System Volume Information
               2 File(s)        391,978 bytes
               3 Dir(s)               0 bytes free

F:\>

Looking for any shadows: no shadows left after I deleted all of them.

DISKSHADOW> list shadows all
Querying all shadow copies on the computer ...
No shadow copies found in system.
DISKSHADOW> System Reserved

WSb Sceduled backup:

I deleted the scheduled back which was working for awhile and then recreated it the scheduled backup:

The backup fails with the error that there is not enough disk space.

During the recreation of the scheduled backup the process reformatted my drive L:

Drive L shows empty with 930GB in size and 11Mb in use.  

The full backup estimate is 327GB.

I tried running the backup from the elevated PS:

PS F:\> wbadmin start backup -systemstate -backuptarget:H
wbadmin 1.0 - Backup command-line tool
(C) Copyright 2004 Microsoft Corp.

Retrieving volume information...
This will back up volume System Reserved(F:) (Selected Files),Data(E:) (Selected Files),Local Disk(C:) (Selected Files)
to l.
Do you want to start the backup operation?
[Y] Yes [N] No y

ERROR - The specified backup location could not be found or is not a
supported backup storage location.
PS F:\>

I assigned a drive letter to the backup drive to show the space free; drive H is the backup drive.

PS F:\> Get-WmiObject -Class Win32_LogicalDisk | Select -Property DeviceID, @{Name='FreeSpaceMB';Expression={$_.FreeSpac
e/1MB} } | Format-Table -AutoSize

DeviceID     FreeSpaceMB
--------     -----------
A:                     0
C:         12128.4765625
D:                     0
E:       537155.28515625
F:                     0
G:         68071.9921875
H:        952181.2109375

PS F:\>

Might anyone have some other ideas?

Thanks in advance.

Cheers