While debugging the VMWare system template fixed the cd rom device name that was causing the systemvm.iso not to load. After this the SSVM and CPVM are coming up fine.
On router VM creation though it failed as this file /etc/udev/rules.d/70-persistent-net.rules was present in the template as a directory ! This file is recreated on reboot so I have created another template after removing this directory. Please, confirm if that is right. I will publish the template soon as it is still uploading. -abhi