The issue is that there seems to be a problem with active directory.
This could be caused by the image being older and everything is out of date which can occur on a domain controller if the image is too old.
So this machine should needs to be dc promo down and then dc promo up again.
I believe this is the problem as in the application log there are denies for NTAuthority/System.
As well as messages regarding accounts not being able to be verified and group policy was aborting, then access denied messages.