Recently we have been getting this error The transfer failed: 'Timeout taking VSS snapshot of 'servername'.'. This error isn't happening on every backup, around half of them per day though. It doesn't matter what time the backup runs. I've seen it succeed at 8 am then fail at 9 am, succeed at 3am, but fail at midnight.
Rapid recovery is giving a warning on one of the volumes in that server, the volume is below 30% free space (it has 29% free space left). I don't think that is causing the issue because VSS only needs 10-15% free space typically.
I did increase the VSS timeout in the registry to 6 minutes, and that looked like it succeeded when I did an on demand incremental snapshot, but then a couple hours later the scheduled snapshot failed with the same vss timeout error.