RDP session to 2012 R2 server comes up with "Not enough storage is available to complete this operation"

I've just set up two new servers in identical fashion which will be hyper-v hosts.
They both have Windows Server 2012 R2 Datacentre installed. 128GB of RAM and c:247GB free, d: 1.9TB free. Resources are not an issue.
Only role installed is Hyper-V on both.
I can RDP to one server without a problem but the other is complaining with the message above. The only option is to click OK and this exits the session. I can log in fine through the Drac card of the server.
I get terminalservices events 261, 1149, 40.
At this time I also get Desktop Window Manager event 9009 - The Desktop Window Manager exited with code (0xd00002fe).
The other strange issue which may or may not be relevant is when I enter task manager on the affected server, the User details tab has lots of entries (approx. 60) with no names and 0% CPU/Memory. This looks odd to me.
Any help gratefully received as I don't want to rebuild from scratch if it is a basic tweak setting somewhere.

Hi Sir,
What I understood from this error was thata RESTRICTED amount of MEMORY allocated for particular type of OS RESOURCE,
has got EXHAUSTED.<o:p></o:p>
<o:p> </o:p>
In both the cases above,
the resource type that was getting exhausted or causing other resources to be exhausted was a HANDLE. A Handle is an OS object used to get a reference of another object (like File, registry,
port etc.). It’s using these handles that a process will work with open files, read registry keys or work with a network port.<o:p></o:p>
<o:p> </o:p>
In both the above scenarios,
we saw a process (Non-Microsoft) consuming large amount of Handles. You can view the handles owned by different processes through
"Task Manager" in Windows. In the "Task Manager", under the Process tab you can add an additional column to display Handles information.
http://blogs.technet.com/b/abizerh/archive/2009/07/12/troubleshooting-the-error-not-enough-storage-is-available-to-complete-this-operation.aspx
>>Any help gratefully received as I don't want to rebuild from scratch if it is a basic tweak setting somewhere.
Instead of rebuilding , you may try to perform in-place upgrade .
Best Regards,
Elton Ji
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