http://dailyvmtech.wordpress.com/2012/10/31/unable-to-allocate-processing-resources-error-no-backup-proxy-is-able-to-backup-this-vm-check-processing-mode-settings-on-proxies/

To sort out this issue;
1. Make sure your Proxy Server can see the VMFS LUNs inside the Disk Management of the Windows.
2. Make sure the Proxy configured as Direct SAN Access.
3. Make sure the Direct SAN Access Proxy is selected in the Backup Job Configuration / Storage Section.
4. If you are still getting the error and failing to process the backup further, Open the Proxy Configuration under Backup Infrastructure -> Backup Proxies and select the desire proxy.
Right Click on the Desired Proxy and Select Properties in the Selected DataStores, select the VMFS LUNs which contains the target Backup VMs manually and try..