Based on the error might have occurred due to the OS deployment failed from the Portal side as it was unable to pass on some of the required paramaters which is why you got TimeOut message.
VM did not finish the deployment correctly. But as you mentioned that the status is running, I would recommend to try stop (deallocate) and start the VM and see if that resolves the issue. If this does not help to resolve the error.
My recommendation is to delete that Virtual Machine, take a snapshot of the OS Disk, create a disk from the snapshot and create the machine from that disk. Please use this link as reference to create a VM from a VHD by using the Azure portal in order to carry this process out (as you did not mention any OS in your question this sample is for Linux).
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