You can't read a 64 bit key from 32 bit service (pandora agent) in Win 2008 unless you use this specific modifier: "/reg:64".
So, the modified command:
"reg query "HKLM\SOFTWARE\Microsoft\Virtual Machine\Guest\Parameters" /v PhysicalHostName /reg:64"
works like a charm, reporting the right host name.
http://support.microsoft.com/kb/948698Rgds.