<HostFolder>D:</HostFolder> <---------- This is OK
<SandboxFolder>D:</SandboxFolder> <---------- This is wrong
I don't think you can map anything to "D:" in Sandbox, because within Sandbox there is only one partition C:, and D:\ is an invalid partition letter. You can map to anything under C:\ in Sandbox. For example:
<HostFolder>D:</HostFolder>
<SandboxFolder>C:\temp</SandboxFolder>