Be sure to backup your VMDK prior to trying these steps.
Here is a way to do it on ESX 3.5 update 2:
(This also works on vSphere 4.1 Update 1)
- Shut down the problem server.
- Edit the settings of the server and note the location of the VMDK file you want to change.
- You can extend the drive using the GUI or using steps 4 and 5.
- SSH to your ESX server and navigate to the data store you noted in step 2.
- Run vmkfstools -X 40G nameofthedisk.vmdk. 40G is the total size of the disk you want to change it to, not the the amount you want to increase it by. (/vmfs/volumes/.....)
- Mount the drive that you want to expand on a Windows 2008 Server.
- Extend the volume from Disk Management by right clicking on it and selecting extend.
- Shut down the 2008 server and remove the disk from the settings.
- Boot up the old problem server.
- It will likely ask you for a reboot after the OS detects what it thinks is a new drive.
- Reboot, and Voila! Your C drive is now bigger!
NOTE: You must have contiguious space where the original C drive exists for this to work.