Catalog creation fails with error: "Creation of Image Preparation VM Failed, message Could not retrieve the network with reference [dvportgroup-xx] as it no longer exists".
We usually receive this error message when the Distributed Virtual Port Group on the hypervisor is modified or deleted. 

If you encounter this error message, you will have to re-create the host connection and the catalog.

Please follow the below steps to recreate the same.
1. Browse to the Hosting tab in Studio and select Add new Host Connection and Resources.
2. It will give you an option to add new Resources to existing connection or create a new connection. Select New Connection and complete the wizard by selecting the hypervisor host/cluster and the corresponding network.
3. Once the host connection is created, Test the connection and make sure that there are no errors.
4. Now browse to the Delivery Group, place the machines in maintenance mode and shut down all the machines in that Delivery Group. 
5. Once the machines are down, select all the machines and right-click on it. You will find an option to Remove from Delivery Group. Select the option. Now all the machines will be removed from that Delivery Group
6. Now browse to Machine Catalogs, Select all the machines in the Machine Catalog and click on Delete. You will see an option to Delete the Machine and leave the machine accounts in Active Directory.
7. Once all the machines are deleted from the catalog, right-click on the catalog and delete it.
8. Now select the option to create a new Machine Catalog and select the new host connection that you created. At the penultimate step of the wizard, you will have see an option to select the machine accounts for the new VMs. Select the accounts that were previously linked to the machines and finish the wizard.
9. After the new machines are created, browse to Delivery Group and right-click on the one in which you need to add the VMs. You will find an option to Add Machines to the Delivery Group. Select that option and add the newly created VMs.
 

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Problem Cause

Modifying or renaming any of the properties (network, storage and/or hypervisor) is not supported and it will impact the machines and machine catalog created off that host connection. If any changes are made, you will not be able to add machines or update that catalog and you will have to recreate the machines and the catalog. These entries are stored in the site database and are static in nature. It gets recorded in the database at the time when you create the host connection. So the only resolution will be to recreate the host connection and the machine catalogs.