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Can't connect to Terminal Server with "Negotiate" and Network Level Authentication enabled

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Hello,

I've searched extensively and cannot find a definitive solution to this problem. Here is the current situation:

2 Servers: 1 Windows Server 2008 R2 acting as a database server (DB1), 1 Windows Server 2008 R2 acting as a terminal server (TS1)

1 Windows 7 Workstation (my work laptop)

I have configured the TS1 with RD Session Host to have 'Negotiate' as the security layer and have checked "Allow only connections from computers running Network Level Authentication."

With a Windows 7 Pro computer, fully up to date with updates, including RDP 8.1 (as verified by looking at the 'About' window from the Remote Desktop Connection program), I cannot connect to the TS1 when these settings are in place. I get a credential prompt, but when I attempt to login, I get "The Logon attempt failed." When I change the Security layer to "RDP Security Layer" then there is no problem whatsoever. I establish a session, and can log on as expected.

I can RDP to the DB1 with NLA with no problem as well.

I would much prefer to use SSL and NLA rather than simply the RDP native encryption, but I cannot for the life of me figure out what the underlying issue is here. I have tried adjusting Group Policy with the whole "Send LM, NTLM, use NTLMv2 if negotiated" etc, but all to no avail.

As a note, there is no 3rd party certificate installed on the TS. Only the Self-Signed certificate that is generated automatically.

Any help would be appreciated!


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