RDP fails with "This computer can't connect to the remote ..

Hi there,

Has anyone else experienced the following problem with a Remote Desktop
Connection to a Windows Server 2003 SE SP2
with all current High Priority and Optional updates applied? Any
suggesetions for remediation?

The following is displayed in a critical error pop-up dialog box:

Remote Desktop Disconnected

This computer can't connect to the remote computer.

The connection was lost due to a network error. Try connecting again. If
the problem continues, contact your
network administrator or technical support.

The error occurs regardless if the connection is attempted remotely from a
Windows XP workstation or even locally through
the loopback interface. The checkbox for "Enable Remote Desktop on this
computer" has been selected in the System Properties, Remote tab.

Netstat -anb indicates the following:

TCP 0.0.0.0:3389 0.0.0.0:0 LISTENING 2944

tasklist /FI "PID eq 2944" indicates the following:

Image Name PID Session
Name Session# Mem Usage
========================= ======== ================ ===========
============
svchost.exe 2944 Console
0 4,468 K

Windows Defender, Software Explorer tool indicates the following:

Microsoft Generic Host Process for Win32 Services
File Name: svchost.exe
Display Name: Microsoft Generic Host Process for Win32 Services
Description: Generic Host Process for Win32 Services
Publisher: Microsoft Corporation
Digitally Signed By: Microsoft Windows Verification Intermediate PCA
File Type: Application
Auto Start: No
File Path: C:\WINDOWS\System32\svchost.exe
File Size: 14848
File Version: 5.2.3790.3959 (srv03_sp2_rtm.070216-1710)
Date Installed: 2/17/2007 10:04:01 AM
Process ID: 2944
User Name: NT AUTHORITY\SYSTEM
Services: Terminal Services
Classification: Permitted
Ships with Operating System: Yes

The Terminal Services Service is executed as follows:

C:\WINDOWS\System32\svchost.exe -k termsvcs

The Terminal Services Manager displays "The protocol is currently enabled"
for the RDP-Tcp (listener).

A TCP connection with Telnet to port 3389 succeeds. An RDP session back to
the
XP workstation succeeds. No Event Viewer messages are logged. I've
searched MS and
the Internet and found there is not a lot of information related to the
error message displayed.

Hope this is the appropriate NNTP News Group. Any assistance is most
appreciated.

TIA