RDP Crashes in WIN7

Hello and thank you for taking the time out to read my question.

I have spent lot's of time surfing the net to get this resolved to no avail.

Scenario:
Machine running Win7 Pro x32
4gb RAM  
Intel Core 2 Duo E8400

I performed an OS update yesterday. Since then all hell has broken loose. PDF's wouldn't open, printing stopped, RDP crashes.
I did a system restore to before the updates. Everything returned to normal but RDP.
Every time RDP get's launched it crashes.

The Application log states:
Faulting application name: mstsc.exe, version: 6.1.7600.16385, time stamp: 0x4a5bcaec
Faulting module name: ntdll.dll, version: 6.1.7600.16559, time stamp: 0x4ba9b21e
Exception code: 0xc0000374
Fault offset: 0x000c2913
Faulting process id: 0x156c
Faulting application start time: 0x01cbdcf3daf32213
Faulting application path: C:\Windows\system32\mstsc.exe
Faulting module path: C:\Windows\SYSTEM32\ntdll.dll
Report Id: 3371d255-48e7-11e0-a678-b8ac6f47d410

I went to a different machine on the network (same parameters/specs) and copied the ntdll.dll to the affected machine. It did not seem to have any effect on the issue. When I try to launch RDP instead of "program crashed and needs to restart message" I get the message below.

Files that help describe the problem:
  C:\Users\rhugel\AppData\Local\Temp\WERAAC0.tmp.WERInternalMetadata.xml
  C:\Users\rhugel\AppData\Local\Temp\WERBF79.tmp.appcompat.txt
  C:\Users\rhugel\AppData\Local\Temp\WERBF99.tmp.mdmp

Read our privacy statement online:
  http://go.microsoft.com/fwlink/?linkid=104288&clcid=0x0409

If the online privacy statement is not available, please read our privacy statement offline:
  C:\Windows\system32\en-US\erofflps.txt

I tried to locate the tmpappcompat.txt but it's not located in that directory.

I'm not trying to restore a bit further to 2/28 as supposed to 3/6. Not sure if this will have an effect on anything.


Any thoughts/input would be greatly appreciated.
As always i'm a grateful for your assistance.

~Milosz,

PS. I thought about reinstalling RDP it that is possible w/o having to have to hack the registry.