The solution for this issue is as follows, which is very strange, open the following registry locations on (WDS/MDT are on the same OS) server:
Delete all entries except
REMINST and open powershell, run the following:
Restart-Service -Name LanmanServer -Force
chkdsk /F c: and
chkdsk /F d: and
sfc /scannow then
reboot the server... check those registry entries again, you will find them correctly written..
To add more about traoubleshooting this issue, I also tried closing MDT console, and I ran the following on powershell:
Which also did not work. Then I deleted all the deployment shares, rebuilt them, with no success. The only way things worked for me was to delete those registry entries as described earlier. I also removed and isntalled MDT many times, also with no success...
Hope this helps, because non of the solutions I found while googling worked for me.