All VMs - Unable to stop/deallocate/start/resize

As usual, something in Azure was working and all of a sudden services just crapped out. We have AVD session hosts and a few VMs on US West 3. Working fine 2 months. Today we are unable to stop/start or even resize any VMs. Every single VM is returning what you see below. We verified no changes in RBAC, no resource locks, no Azure outages, and no quota related problems. Any thoughts? Azure support is atrocious and we seem to just get AI generated responses. Tracking ID#2608200010001386

The Azure Compute API is returning:

• HTTP 500 – InternalServerError
• InternalOperationError
• x-ms-failure-cause: service VERBOSE: Authenticating to Azure ... PS /home/user> az vm start --subscription [REDACTED] --resource-group [REDACTED] --name [REDACTED] --debug cli.knack.cli: Command arguments: ['vm', 'start', '--subscription', '[REDACTED]', '--resource-group', '[REDACTED]', '--name', '[REDACTED]', '--debug'] cli.azure.cli.core: Using packaged command index for profile 'latest'. cli.azure.cli.core: Loading command modules... cli.azure.cli.core: Found a match in the command table. cli.azure.cli.core: Raw command: vm start cli.azure.cli.core: Command table: vm start az_command_data_logger: command args: vm start --subscription {} --resource-group {} --name {} --debug cli.azure.cli.core.sdk.policies: Request URL: https://management.azure.com/subscriptions/[REDACTED]/resourceGroups/[REDACTED]/providers/Microsoft.Compute/virtualMachines/[REDACTED]/start?api-version=2022-11-01 Request method: 'POST' Request headers:

  'CommandName': 'vm start'
  
  'ParameterSetName': '--subscription --resource-group --name --debug'
  
  'User-Agent': 'AZURECLI/[VERSION] (...) cloud-shell/[VERSION]'
  
  'Authorization': '*****'
  

  Request body: This request has no body urllib3.connectionpool: https://management.azure.com:443 "POST /subscriptions/[REDACTED]/resourceGroups/[REDACTED]/providers/Microsoft.Compute/virtualMachines/[REDACTED]/start?api-version=2022-11-01 HTTP/1.1" 500 125 cli.azure.cli.core.sdk.policies: Response status: 500 Response headers:

  'Cache-Control': 'no-cache'
  
  'Content-Type': 'application/json; charset=utf-8'
  
  'Retry-After': '180'
  
  'x-ms-failure-cause': 'service'
  
  'x-ms-ratelimit-remaining-subscription-writes': '199'
  
  'x-ms-ratelimit-remaining-subscription-global-writes': '2999'
  
  'x-ms-routing-request-id': 'WESTUS3:[REDACTED]'
  
  'Date': 'Thu, 20 Aug 2026 [REDACTED] GMT'
  

  Response content: { "error": {

  "code": "InternalOperationError",
  
  "message": "An internal error occurred in the operation."
  

  } }