OK, marking this solved... It was the phantom reboots causing issues because the tools were not fully installed, only thing I can't understand is why only 2 out of 3 Windows servers would quit. Any way, got the Xen Tools updated and a couple reboots later, everything is working again.
Also I can now report that a bug that was fixed maybe a year ago is confirmed to work in my system. The bug was backing up a Windows VM that had a lot of empty space in the drive (over 250GB free) and turning on compression. It would time out counting zeros because it thought the process wasn't doing work. Both of these VMs are now compressing with zstd, one of them is substantially smaller now, the other only shrunk about 20GB.
Because of the way Windows uses the drive, these are all full backups. The differential never seemed to be small because Windows does a lot of changes on the drive (there is a post about this somewhere in here from Olivier).