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RDP 8.0 clients cannot connect to RDP 2012 Gateway Server

Hi Folks,
I cannot get any RDP 8.0 clienst to connect to my 2012 Gateway server. RDP 7.1 clients have no issue. The error is "Your computer can't connect to the remote computer because and error occurred on the remote computer that you want to connect to. Contact your network administrator for assistance."

I did some googling and tried the following suggested fixes, whcih did NOT work:

1. Disable TLS 1.2 in registry
2. Change value for Computer Configuration\Policies\Windows Settings\Security Settings\Local Policies\Security Options\Network security: LAN Manager authentication level  to Send NTLMv2 response only

Any ideas?

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see following audit failure from security log:

  - Provider

   [ Name]  Microsoft-Windows-Security-Auditing
   [ Guid]  {54849625-5478-4994-A5BA-3E3B0328C30D}
   EventID 4625
   Version 0
   Level 0
   Task 12544
   Opcode 0
   Keywords 0x8010000000000000
  - TimeCreated

   [ SystemTime]  2013-08-30T11:02:22.089684600Z
   EventRecordID 23745
  - Execution

   [ ProcessID]  580
   [ ThreadID]  4820
   Channel Security

- EventData

  SubjectUserSid S-1-0-0
  SubjectUserName -
  SubjectDomainName -
  SubjectLogonId 0x0
  TargetUserSid S-1-0-0
  TargetUserName rummelr3738
  TargetDomainName AVCTLAB
  Status 0xc000035b
  FailureReason %%2304
  SubStatus 0x0
  LogonType 3
  AuthenticationPackageName NTLM
  WorkstationName SHN-IT8F2L5Q1
  TransmittedServices -
  LmPackageName -
  KeyLength 0
  ProcessId 0x0
  ProcessName -
  IpAddress -
  IpPort -
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