Problem:

After a recent image update one of our XenApp/Windows servers was booting but hanging at the ‘Applying Microsoft Offline Files Policy’ and taking a long time to ‘finish’ and display the CTRL + ALT + DEL screen. The Windows offline files policy set to disable for all.

Solution:

This was in fact a red herring, it was a server powershell start up script that was hanging the device. Running a tasklist /s \%servername it was noted there were copies of powershell.exe and gpscript.exe still running

Upon terminating these processes the server instantly sprang into life.