Blank blue screen on logon for all but administrators

Server 2008 SP2
Running as a RDS Server.
Domain is a SBS 2008 Domain.
Following some updates installed over 10 days an issue occured as follows;
RDS Users were getting a blue screen on logon.
SBS Web sites all failed to start.
Issue with the SBS Server was .Net Framework updates corrupting the permissions.
Reset permissions following .Nert repairs and PSS support.
RDS Server having subtlety different issue.
Users need to be local admins on the RDS server to login, otherwise they get a blank blue screen.
Trying to start task manager gets a 0000022 error, task manager application failed to start.
If you leave the user for the screen timeout, you get a 0000022 error, scrsvr.exe application failed to start.
If you log in locally with the user, same issue.
No interesting events in process monitor, process explorer or event logs.
If I watch a user who is not an administrator logon, I see three process running
taskeng.exe
rdpclip.exe and
dwn.exe 
Removed AV and seeing some more GPO events logged.
removed the user and placed them in a GPO with no inheritance - same issue.
Enabled UAC - even local administrators were getting a blank logon screen, all except the domain administrator account.
in the process of uninstalling .Net updates.
Anyone got any better troubleshooting I can try?
Joe

Hi Joe,
Thank you for your post.
From your description, 
I see the current issue you are facing is: Windows Server 2008 displays blue screen on logon for all users, except for local administrators.
Please let me know if there is any update. Thanks for your time.
Here I’d like to know that the blue screen showed up after logging into the system, but with no desktop. Right?
Have you tried booting in safe mode? If not, please try it to see if that makes any difference. Based on your description, the issue happens to all users except for the
local admins, we suspect the issue might be GPO restriction related. If we are able to boot in safe mode, then please take the following steps to check the issue:
1. Delete the following registry key in safe mode after backing it up first:
HKEY_LOCAL_MACHINE\SOFTWARE\Policies\Microsoft\Windows\Safer
2. Restart the server to check if the issue is solved.
Please let me know if there is any update after that. Thanks for your time.
Best Regards,
Sophia Sun 
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