Thanks for enlightening me oh great one 
I do have very little expertise in convertor. But I can still suggest you one thing. To rule out the "description = "The operation experienced a network error", try to convert a dummy VM say 1MB disk from 4.0 to 5.1, since the VM and ESX are in same vSwitch, it should complete very quickly.
And to rule out the role of DCs, check out this if you haven't soVm ware converter 5.0 issues just on DC server, the others went fine