I just wanted to post this up here to help admins who may be experiencing this same issue.
I wrote a new blog article (found here: http://www.pc-professionals.com/blog/virtual-machine-disk-s-need-consolidation/), detailing the problem and how I was able to fix the issue.
Long story short, you will see this message in a VM if the VM has snapshots that have failed to properly consolidate back to another snapshot or the parent disk upon deletion of one or more existing snapshots. This warning can prevent the VM's virtual disks from being configured or cause other issues.