Access to the physical memory would allow them to mount the encrypted partition separate to the VM. An auto-dismount encryption would protect against those accessing via the VM which helps.
Other than partition encryption you could also have secondary encryption on important files or folders on the partition. Also possibly setting up an email send on access to alert you when someone is accessing the partition. This may allow you to wipe it remotely if you feel its insecure.
If its really important an auto wipe encryption may be possible however it is always very difficult if you don't have physical access.
The best option at the moment is simply to encrypt using a trusted strong partition encryption software like http://www.truecrypt.org/