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Only time I have seen this specific issue is after running sysprep on a VM and trying to log in before it completes. However, given your troubleshooting steps, it doesn't sound like the issue you experienced. The 3.1.2 agent makes some changes to the HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows NT\CurrentVersion\Winlogon\Userinit key, I suppose it's possible the registry got corrupted or something funky like that.
I'd be interested to know if it happens again if you upgrade the agent. Might want to take a VM shapshot first
If it does crater again, use the service console or remote registry to look at the Userinit key and see if it has anything other than "C:\WINDOWS\system32\userinit.exe," If it does, change it back to the default (which is "C:\WINDOWS\system32\userinit.exe," and that includes the trailing comma) and see if you are able to log in.
~Aaron Patten
Please award points for helpful answers. I got kids to feed ![]()