Stick with a vm
Just to let you know - I am running W10 ( and W8.1) in VMware Player and there was never the slightest problem. And I make a lot of "experiments" but it is pretty rugged.
Are you able to 'Mount' the ISO outright by clicking on it?
If you haven't got W8.1 Pro, maybe the VM isn't letting it mount either.
Don't know, I'm just throwin ideas around!
Edwin, are you sure that works. I have never mounted an .iso by double clicking on it.
I've forgotten exactly how to do this.. but have you checked the SHA hash values on the downloaded ISO against the values on the download website? If the ISO isn't downloaded correctly, then it won't work anywhere, whether in a virtual machine or elsewhere.
(Maybe someone can remind me how to check the SHA values?)
By the way, I'm another fan of running in a VM rather than dual booting or installing correctly. It's much safer if something goes wrong.