Cross Forest User GPOs not applying

I know I've read a ton of forums concerning this issue and most were resolved but nothing read so far has helped and I'm really hoping there are a few ideas out there that I have missed.
We have two forests: a new 2012 forest and an 2008 at an 2003 forest level with two way forest trust.
We are able to login to computers in the 2012 forest regardless of domain with any user in the 2008 forest.  However we are setting up our workstation environment in the 2012 forest which requires us applying user policies.  All users are in the
2008 forest.  We have enabled the allow cross forest policy and the loopback processing applied to the OU where the client machines are located in Active Directory.  We have verified the trust on both sides and tested DNS using nslookup on both sides.
 The DCs for both forest are located in the same physical building but two different subnets.  The WAN guy has assured us that there are no ACLs involved.  The firewall has been shut off on all DCs and all workstations.  I see no LSA errors
on the DCs.  Each forest has a stub DNS zone to the other forest zones.  I've been able to successfully setup computer gpos to map drives to the users when they login to 2012 clients.
I'm completely lost for what else we need to be looking at to solve this problem.   Any suggestion would be most welcome.  

Hi,
Before going further, what settings have we configured? Which Loopback mode have we chosen, Merger or Replace? What are operating systems of our clients?
For further troubleshooting, we can follow the following article to collect Gpsvc.log file.
How to enable GPO logging on windows 7 /2008 r2 ?
http://blogs.technet.com/b/csstwplatform/archive/2010/11/09/how-to-enable-gpo-logging-on-windows-7-2008-r2.aspx
After getting the log, you may upload it to OneDrive and provide us the download link.
Besides, we can try using netmon.exe to further trace network to see if this is caused by network traffic.
Microsoft Network Monitor 3.4
http://www.microsoft.com/en-in/download/details.aspx?id=4865
How to use Network Monitor to capture network traffic
http://support.microsoft.com/kb/812953/en-us
TechNet Subscriber Support
If you are TechNet Subscription user and have any feedback on our support quality, please send your feedback here.
Best regards,
Frank Shen

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