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Group Policy nla rdp local security authority cannot be contacted

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Trying to RDP from Win7 to Win7 domain workstations in the same vlan.

RDP settings are all set.  Under system properties, remote: allow connections only from computers running Remote Desktop with Network Level Authentication(more secure).

User in RDP Group on destination pc.  firewall exception.

Group Policy - Access this computer from the network(remote desktop users) allow log on through rdservices(remote desktop users), allow log on locally(users, authenticated users)

rdp connection throws error:

"An authentication error has occurred, the local security authority cannot be contacted."

The user's password is not expired, passwords are not blank. Correct dns servers are listed.  User has domain profile on destination computer.  Lowering the rdp setting to "allow connections from computers running any version of Remote Desktop (less secure) works.  Or putting the user in the local admin group also resolves rdp.  We would like to use NLA and have the user only in the rdp group.  What might we be missing here?  Is being an admin required to use NLA for rdp?


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