It means exactly what it say: The disk latency threshold was exceeded. What's the threshold value and what average and peak latency are you having on this VM's RDMs? Also, about how many average IOPS is this VM generating (check performance charts or (r)esxtop for these values).
High physical disk latency, as clearly implied by it's name, generally points in the direction of a storage performance issue. There can be a million causes for this ranging from from disk failures or RAID rebuild operations, to SAN-misconfigurations, or simply the physical disks hitting their IO limits etc.
Please share a bit more details about your storage setup in addition to the values mentioned above.