Hello Warman, Alan,
Based on the error message "rpc error: code = DeadlineExceeded desc = context deadline exceeded," it seems like the deployment is timing out, which can happen for several reasons.
Please check these:
Delete any partially created image versions or resource locks. Clear or recreate the local gallery or image definitions if needed.
In the Azure portal: Go to Monitor > Activity log. Filter by the failed deployment time and operation name: Create Image Version or similar.
Confirm that the identity used for deployment has the necessary permissions to access both the storage account and the Azure Compute Gallery.
Ensure your subscription/resource group has enough quota/resources available.
Please check this document: The resource operation finished with a terminal provisioning state of "Failed", Time-out exceeded
If you have any further queries, let me know. If the information is helpful, please click on Upvote.