Terminal Server 2008 R2 - problem with group policies being applied to new TS users

I have this weird problem with my client's terminal server (running on Windows 2008 R2 Standard):

Whenever a new TS user logs in to it, it doesn't process any of the group policies for that user, and the main group policies they care about are the folder redirection policies. Whenever I do a "gpupdate/force" from the command prompt for that user, it says:

"The processing of Group Policy failed. Windows attempted to read the file \\JS.local\SysVol\JS.local\Policies\{999A1BB5-8445-4971-BD62-869194262288}\gpt.ini from a domain controller and was not successful. Group Policy settings may not be applied until this even is resolved. This issue may be transient and could be caused by one or more of the following:
a) Name Resolution/Network Connectivity to the current domain controller.
b) File Replication Service Latency (a file created on another domain controller has not replicated to the current domain controller).
c) The Distributed File System (DFS) client has been disabled.
Computer policy could not be updated successfully. The following error were encountered:"

etc. etc.

This happened with a user recently when they first logged on to the TS server, but I got it resolved by disjoining the TS server and rejoining it to the domain. The user logged on after that and all group policies applied just fine and he sees his redirected folders just fine.

Now we put another user in the RDP security group and have logged on to the TS server as that user, and the same issue is happening again. And what is weird is that once this happens, if I try to to "gpupdate/force" as the domain admin, it still gives me the same error - so it seems the error is not user specific.

I ran GPRESULT /H GPReport.html as suggested in the error, and the main issue probably comes from the verbiage that says:

"Group Policy Infrastructure failed due to the error listed below.
The system cannot find the path specified.
Note: Due to the GP Core failure, none of the other Group Policy components processed their policy. Consequently, status information for the other components is not available.
Additional information may have been logged. Review the Policy Events tab in the console or the application event log for events between 11/19/2013 9:24:32 AM and 11/19/2013 9:24:33 AM."

This error only happens on the TS server with any user I try, including the domain admin. I can run "gpupdate/force" on all other machines and servers just fine with no errors.

Any help is much appreciated! I just can't be disjoining and rejoining the TS server to the domain for every new TS user that comes along.