WSUS GPO Not Applying to Windows 7 Clients.

I can not get the windows 7 clients to apply the wsus GPO.

My Environment:
1. Windows server 2008 R2 with WSUS (Version: 3.2.7600.226) installed as a role.  I have tried to get a newer version via windows patches but none of them seem to update the version.
2. GPO created for the clients (Picture attached)
3. Clients are being reloaded with MDT and WDS to windows 7 Pro x64


     On my test group, only a few computers started checking in with the WSUS server or they report "Not Yet Reported".  These clients have other GPO's (printers,Mapped Drives, etc) assigned to them and they are applied just fine.  I can run rsop.msc on the client machine as the domain admin account and it shows that the gpo is applied at the computer level.  If I run rsop under the user account, rsop error out for the computer level changes.  I can go to HKEY_LOCAL_MACHINE\Software\Policies\Microsoft\Windows\WindowsUpdate under both accounts and they show the default settings.  I can run gpupdate /force under both admin and user accounts and this will update the registry setting with my internal WSUS server info and start to show in the WSUS console.
GPO.jpg
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