Windows – Remote Desktop Dropouts: “Because of an error in data encryption, this session will end.”

I have been researching this as well and I feel like I went down the same road is you since every fix applies to vista/xp. However on Microsoft Technet I found someone who fixed this by deleting the certificate then reconnecting:

I just came across this error myself. I was attempting to remote desktop in from one XP machine >to another. To fix, I went into the Registry:

HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\TermService\Parameters

After exporting this for safekeeping, I deleted the Certificate keys. I restarted the target PC >and was able to successfully connect. I can only surmise that the problem is a corrupted >certificate or something. Deleting the certificate stored in the registry seems to have reset it. >The certificate key is different from the previous one, so maybe the target PC's certificate >expired?

Mostly just guesswork here, but this solution worked for me!

It may not be a definitive fix since this issue seems so random because it worked for months before now but I figured it's worth a shot for you to try.

Source

Update

Try deleting the string value for the machine you are trying to connect to under:HKEY_CURRENT_USER\Software\Microsoft\Terminal Server Client\Default

Let me know how it goes I'll check back when I get to my hotel after dinner.

I started having a similar problem out of the blue on a PC at work--it connected and just hung there at the 'configuring remote session' window.

I found that I needed to go into the options under the 'Experience' tab and de-select the Persistent Bitmap Caching setting.

Once I disabled that setting I was able to connect quickly as expected.