SSO not working when logging into Win7 VM - Second login required

Created new Windows 7 desktop in a linked-clone pool. Using the View Client to access the new VM, I am prompted a second time with the Windows 7 login. It is not passing the credentials through for the SSO login to Windows.

Using this document (KB 1029391) I have checked the following:

To troubleshoot issues when using SSO in a VMware View Environment:

1. Confirm that the Agent/Client installation or configuration is correct. During installation, select Log in as current user.
   1. This is set in the Client, have tried using both HTML and Client to access, same result. Prompted with Windows login after a successful VMware login.
2. Verify that disclaimers or login banners are not being used when using PCoIP as the display protocol. For more information, see Black View Client log in screen when using PCoIP (1016961).
   1. No banners or notices are being used or see, there is also no 'black view' symptom.
3. Confirm that userinit is configured properly to pass credentials. For more information, see Confirming that the userinit string is configured properly (1028975).
   1. Checked and double checked. Copy?pasted right from this document without a change in symptoms.
4. Confirm that the GINA is chaining correctly. For more information, see Confirming that the GINA is chaining correctly in VMware View Manager 3.x/4.0.x/4.5.x (1029075).
   1. The KB article says this does not apply to Windows 7 desktops.
5. Ensure that no Group Policy conflict exists. For more information, see Ensuring that there are no conflicts between Group Policy Objects and View virtual desktops (1027446).
   1. Have spent hours looking through the policies using RSOP.MSC, cannot find anything that would seem to be related to the login process.
6. Ensure that the Interactive logon: Do not require CTRL+ALT+DEL GPO policy is disabled. For more information, see Single Sign-on does not work in VMware View Desktops (1026797).
   1. This was also checked and set correctly.

I also checked the setting mentioned in KB 1019466:

On Windows Vista, if you install the PCoIP Server component, the Windows group policy Disable or enable software Secure Attention Sequence is enabled and set to Services and Ease of Access applications. If you change this setting, single sign-on does not work correctly.  Ensure that the Windows group policy Disable or enable software Secure Attention Sequence is enabled and set to Services and Ease of Access applications. This is also set as stipulated here.

Anyone have any ideas? I've spent an embarrassing amount of time on this and have not come any closer to getting the SSO to work. I must be missing something -but what?