[BUG] Cowork — VM service not running, persists after all recovery steps (Windows 11)

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report (please file separate reports for different bugs)
• [x] I am using the latest version of Claude Code

What's Wrong?

Cowork fails to start with the error: "VM service not running. The service failed to start." The error persists after all recovery steps suggested by the UI.

What Should Happen?

Cowork workspace should start successfully and the VM service should run normally.

Error Messages/Logs

VM service not running. The service failed to start.

Steps to Reproduce

Open Claude Desktop on Windows 11
Navigate to Cowork
Observe error banner: "Failed to start Claude's workspace — VM service not running. The service failed to start."
Error persists after: restarting Claude, restarting the computer, reinstalling workspace via Help → Troubleshooting, and manually deleting %APPDATA%\Claude\vm_bundles\claudevm.bundle

Claude Model

None

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.68 (Claude Code)

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

Related issues: #27801, #27010, #29941