[BUG] Failed to start Claude's workspace on Domain Computer

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report (please file separate reports for different bugs)
• [x] I am using the latest version of Claude Code

What's Wrong?

Failed to start Claude's workspace
HCS operation failed: failed to create compute system: HcsWaitForOperationResult failed with HRESULT 0x80070569: {"Error":-2147023511,"ErrorMessage":"","Attribution":[{"OperationFailure":{"Detail":"Construct"}}]}
Restarting Claude or your computer sometimes resolves this. If it persists, you can reinstall the workspace or share your debug logs to help us improve.

Ruled out:

Credential Guard ✅ disabled
Hypervisor not loading ✅ fixed with bcdedit
SeServiceLogonRight ✅ fixed with S-1-5-83-0 and S-1-5-80-0
Trend Micro ✅ disabled, no change
UEFI lock ✅ not present
Nested virtualization ✅ physical machine
HCS service itself ✅ starts successfully

Still happening: HcsWaitForOperationResult 0x80070569 / 0xC0370103 during async VM Construct phase, with no Worker process ever spawning.

Logs and Details
cowork_vm_node.log
cowork-service.log

Machine: Lenovo ThinkStation 30GSCTO1WW, domain-joined (JAIVEL)
Windows 11, Hyper-V fully enabled
All GPO fixes applied
Error: HCS 0x80070569 / 0xC0370103 at Construct stage
Cowork version: 1.1.4498.0
Attach: cowork-service.log and cowork_vm_node.log

What Should Happen?

Appreciate an update once you have the resolution.

Error Messages/Logs

HCS operation failed: failed to create compute system: HcsWaitForOperationResult failed with HRESULT 0x80070569: {"Error":-2147023511,"ErrorMessage":"","Attribution":[{"OperationFailure":{"Detail":"Construct"}}]}

Steps to Reproduce

I just installed Claude on my work desktop which is part of work domain. and Cowork gave this error.

Claude Model

None

Is this a regression?

I don't know

Last Working Version

_No response_

Claude Code Version

1.1.4498

Platform

Anthropic API

Operating System

Windows

Terminal/Shell

PowerShell

Additional Information

_No response_