When I try to add the Hyper-V server to the console I get the message "User Credentials cannot be used for local connections"?
What credentials are you trying to use? In my lab, I have vRanger installed on the same Hyper-V host that is -obviously- hosting a VM. It can deploy the agent locally and run a backup to a local disk without further issues. I'm using a local administrator account to run the vRanger service and also using the same account to connect to the agent. I also tried connecting with a domain account and it connected without problems.
Just to clarify, I'm also using the vRanger 7.7 build.