I've run out of things to look into. All the support documents have been gone through and still provide no resolution.
I've checked the service permissions, (sc sdshow spooler) they all match up with other systems and what is output on the support documents. I'm nearly positive that the issue can't be permissions anyway as the software requires all users to be an administrator, so all users are a local administrator. (I haven't looked into why yet but its on the list, I was just recently brought into this team and we've put procedures in place for quick recovery.)
We've applied hot fixes relating to RDS and printing, though I'm not sure which ones they were.
I've combed through group policy and no where is printer redirection disabled. It's setup with all default values regarding the use and redirection of printers and a quick install of W2k8 R2 shows that it works by default. This dev install was joined to the same domain, placed in the same OU, shows the same policies applied, etc, etc, etc,
The server generates all the correct redirected ports but no printers are created. It will also redirect drives without issue, this would seem to rule out the usermode service that handles redirects being broken.
No events are logged related to any of the events and there are no events from the TerminalServices-Printer source.
There were local printers setup. I didn't think it would mattter but as I was running out of ideas I tried deleting them all with no change.
The TS was configured for the software it will be running before we checked out the redirection of printers so the other team responsible to setting up new servers wants to find a fix instead of reloading a new server.
I'm not sure where or what else to look for. Any ideas?
Updates: It wasn't the software, we've installed it on the dev server and redirection continues to work. We're almost at the point where the new server would be able to be deployed in place of the defective one.
We've had microsoft looking into the issue for the past few days but they seem to be just as stumped.