This only started happening after installing SP1 for Server 2008 R2. If I use the shadow command I can connect fine. I have already reviewed the answer provided in http://social.technet.microsoft.com/Forums/en/winserverTS/thread/4b9282a6-5252-40fa-b2e3-fbe3a718f7a2. Remote Desktop Services service is using the Network Service logon so it does not apply to me.
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Remote Control results in Access Denied message when initiated from Remote Desktop Services Manager
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