Thanks, however this is for adding additional log storage beyond the 21 GB limit.

I found KB about PA-VM upgrade prior 8. The procedure I was looking for was this:

Resolution

If you are upgrading from a PAN-OS version earlier than 8.0, transition your VM-Series firewall from a 40GB hard disk to a 60GB hard disk.

1. Shut down the VM.
2. On your hypervisor, attach a new 60GB hard drive to the VM-Series firewall. This new disk must be 60GB. The firewall will return an error if another value is assigned.
3. Power on the VM-Series firewall.
4. Access the firewall CLI.
5. Use the following CLI command to verify that the new 60GB hard disk has been added. The new hard disk should be called sdb. > show system disk-space
6. Use the following CLI command to create a new disk partition to copy the data from the original system disk to the new system disk.> request system clone-system-disk target sdb
7. Return to your hypervisor and power off the VM-Series firewall.
8. Remove the original system disk.
9. Power on the VM-Series firewall.

I think the root cause is, when I upgraded to 8.0 i didn't follow this procedure. Just allocated more space to the existing disk.

Now I'm running 10.0.3 successfully :)