When using the .NET DiscUtils PowerShell Module, I get the following error:
Import-Module DiscUtils.psd1
New-VirtualDisk hd.vhd -Type VHD-dynamic -Size 500MB
Initialize-VirtualDisk hd.vhd -VolumeManager Bios
Initialize-VirtualDisk : Path specified is not a virtual disk
hd.vhd
is valid, and if mounted with other tools, is recognized by Windows Disk Management.