I have a W 2K3 Terminal Server which most of my computers can connect to without a problem. There is one computer which always fails and says:

The client could not establish a connection to the remote computer.

The most likely causes for this error are:
1) Remote connections might not be enabled at the remote computer.
2) The maximum number of connections was exceeded at the remote comptuer.
3) A network error occured while establishing the connection.

I checked the Event Viewer on the server and found Event 50 from TermDD aT the same time the failure happens with the message (The RDP protocol component "DATA ENCRYPTION" detected an error in the protocol stream and has disconnected the client.).

I have already reviewed the KB 323497 and it does not solve my problem.

EDIT*** I just found KB 257894 which explains how to lower the encryption requirements. That works as a temporary fix (I just tested it), but long term I do not want to keep my encryption requirements low!

up vote 3 down vote accepted

The problem computer was only running XP SP2, which does not have RDC 6.0 and does not support FIPS. Downloaded RDC 6.0 on the problem machine and it's solved!

KB 811770 describes the issue.

  • Correct answer. Update the RDP client to V6.0 or later. – Tonny Mar 5 '12 at 11:00

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