This issue will occur if the dependency services are disabled. Please make sure the following services are enabled and running.
– DNS Client
– Function Discovery Resource Publication
– SSDP Discovery
– UPnP Device Host
We can see from the security logon that successful connections are using Package Name (NTLM only): NTLM V2
On the Server 2008 R2 box, in secpol.msc we can see LM & NTLM is refused (As it should be…)
However the client had a group policy, that had been enabled to allow a legacy application to connect to ancient Windows servers, this forced Send LM & NTLM responses
Now the bad way to fix this, is to change the server to a less secure setting (i.e. Send LM & NTLM responses)
While it is best to eliminate servers that still require LM or NTLM, and use the “refuse LM & NTLM” setting, you can compromise by changing the client policy to allow LM & NTLM, but use NLTM v2 if available, this will at least prevent you from downgrading security on your servers running more recent Windows operating systems.