What you describe here is the expected behaviour in the following case:
source flat.vmdk has been created as lazy zeroed thick provisioned and is stored on a VMFS-volume.
I do not understand your exact setup so please provide more data.
If you use dd against flat.vmdks keep in mind that the results will differ depending on the current state of the VM.
Using dd is not the preferred way to clone vmdks - dd should be only used if vmkfstools -i fails.
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Re: Data Corrupt During Cloning VM
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