We were experiencing this issue on many, but curiously not all, of our Windows systems both Windows 7 and XP.

 

Additional indications: When CTRL+ALT+DELETE was pressed in an attempt to bring up the Task Manager so Resource Monitor could be started, following a lenghty delay, an error message would pop up stating "Failure to display security and shut down options when CTRL+ALT+DELETE was pressed. If the operating system does not respond, press ESC or restart the computer by using the power switch."

 

To my knowledge, pressing the ESC key is of no use. So the user is forced to either reset or press and hold the power switch till it powers down. Once the machine has been restarted, all is well for an undetermined period of time (it varies greatly) but then the same thing happens again.

 

I noticed that this was happening on any machine that was still had Windows Update Service running.....even though we sent out a registry patch to turn Windows Update off, some machines refused to turn it off leaving it still running in the background. The only way that I have found to stop the madness is to go into Computer Management  as Administrator and manually disable the Windows Update service. After which there have been no further issues

 

Interestingly, this all started happening following the last Patch Tuesday 7/12/12.

 

Any Ideas?