Remote Desktop to Server 2012 R2 Fails

Hi all, 

Long time no see! I am running into a problem. I have a Windows Server 2012 R2 that does not allow you to RDP (mstsc.exe) from a Windows 7 VDI desktop.

The exact error is (using an online image as a ref):

I have checked the following: 

• Launched mstsc from the Win7 desktop, clicked Show Options, navigated to the Experience tab, unchecked "Reconnect if the connection is dropped" (read that might cause it, idk why though). 
• Ensured that the domain group is in the Remote Desktop Users group, and the server verified that I have permissions to RDP to it. 
• Tried from several servers and VLAN's. 

Additional information:

• mstsc verion on the Win7 desktop is 10.0.14393 (shell version and control version). 
• mstsc version on Server 2012 R2 is 6.3.9600 (shell version and control version). 
• Both server and workstation use Network Level Authentication. 
• I can RDP to other servers that use 6.3.9600 from a desktop with 10.0.14393. 
• I can ping the server from my Win7 workstation. 
• Consoling into the server from vSphere works properly. 
• Nothing shows in the event logs when the RDP fails to work. 
• The error in the picture above happens immediately when I try to connect vs waiting a few seconds to pop up. 

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Edit:

Also verified the the following keys were set. Two of the three were set wrong (notated the ones I had to change): 

HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Terminal Server

Had to change (was 1): fDenyTSConnections = DWord 0
Had to change (was 0): TSUserEnabled = DWord 1

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Winlogon
(was correct): WinStationsDisabled = String 0

Edited July 12, 20179 yr by Redhatcc