Hello All,
We have encountered the same issue during the upgrade on CRM 7.0 EHP1 systemin pre-processing phase.
Found the the batch job RDDGENBB_0 was running for long and freezes the memory couldn't allocate the memory space in my case.
1EETQ204 Upgrade phase "PARDIST_SHD" aborted with severe errors.
Solution:
Restarted the principle and shadows instance to clear the memory and repeated the
PHASE: MAIN_SHDRUN/PARDIST_SHD with INIT option.
The issue got resolved in my case. Hope this can help.
Cheers,
Bharath