Managed to make this occur, not sure if this helps debug / resolve the issue. On a windows 10 slave that was working, I turned on auto logon so my admin user would logon automatically at boot time. Once I did this the same issue above started happening. To which .\username and hostname\username could not rectify the issue. I also disabled auto login and the problem still persists. I will likely build the slave up from scratch again.
Server: Jenkins:lts docker image, ver 2.73.2, jdk8+
Client Windows 10, jdk8+
[ts-syd-01] Starting Virtual Machine...
[ts-syd-01] VM already powered on
[ts-syd-01] Waiting for VMTools
[ts-syd-01] VM Tools are running
[ts-syd-01] Finished wait for VMTools
[ts-syd-01] Waiting for 10 seconds before asking hudson.os.windows.ManagedWindowsServiceLauncher@6b5f20e to launch slave.
[ts-syd-01] Asking ManagedWindowsServiceLauncher to launch slave.
[2018-01-31 07:34:34] [windows-slaves] Connecting to 10.7.65.217
Checking if Java exists
java -version returned 1.8.0.
[2018-01-31 07:34:42] [windows-slaves] Copying jenkins-slave.xml
[2018-01-31 07:34:42] [windows-slaves] Copying slave.jar
[2018-01-31 07:34:42] [windows-slaves] Starting the service
[ts-syd-01] EXCEPTION while starting VM
java.lang.reflect.UndeclaredThrowableException
java.lang.reflect.UndeclaredThrowableException
at com.sun.proxy.$Proxy94.start(Unknown Source)
at hudson.os.windows.ManagedWindowsServiceLauncher.launch(ManagedWindowsServiceLauncher.java:342)
at hudson.slaves.DelegatingComputerLauncher.launch(DelegatingComputerLauncher.java:64)
at org.jenkinsci.plugins.vSphereCloudLauncher.launch(vSphereCloudLauncher.java:248)
at hudson.slaves.SlaveComputer$1.call(SlaveComputer.java:262)
at jenkins.util.ContextResettingExecutorService$2.call(ContextResettingExecutorService.java:46)
at java.util.concurrent.FutureTask.run(FutureTask.java:266)
at java.util.concurrent.ThreadPoolExecutor.runWorker(ThreadPoolExecutor.java:1149)
at java.util.concurrent.ThreadPoolExecutor$Worker.run(ThreadPoolExecutor.java:624)
at java.lang.Thread.run(Thread.java:748)
Caused by: java.lang.reflect.InvocationTargetException
at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method)
at sun.reflect.NativeMethodAccessorImpl.invoke(NativeMethodAccessorImpl.java:62)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:43)
at java.lang.reflect.Method.invoke(Method.java:498)
at org.kohsuke.jinterop.JInteropInvocationHandler.invoke(JInteropInvocationHandler.java:140)
... 10 more
Caused by: org.jinterop.dcom.common.JIException: Service Logon Failure
at org.jvnet.hudson.wmi.Win32Service$Implementation.start(Win32Service.java:149)
... 15 more
ERROR: Unexpected error in launching an agent. This is probably a bug in Jenkins
org.jinterop.dcom.common.JIException: Service Logon Failure
at org.jvnet.hudson.wmi.Win32Service$Implementation.start(Win32Service.java:149)
Caused: java.lang.reflect.InvocationTargetException
at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method)
at sun.reflect.NativeMethodAccessorImpl.invoke(NativeMethodAccessorImpl.java:62)
at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:43)
at java.lang.reflect.Method.invoke(Method.java:498)
at org.kohsuke.jinterop.JInteropInvocationHandler.invoke(JInteropInvocationHandler.java:140)
Caused: java.lang.reflect.UndeclaredThrowableException
at com.sun.proxy.$Proxy94.start(Unknown Source)
at hudson.os.windows.ManagedWindowsServiceLauncher.launch(ManagedWindowsServiceLauncher.java:342)
at hudson.slaves.DelegatingComputerLauncher.launch(DelegatingComputerLauncher.java:64)
at org.jenkinsci.plugins.vSphereCloudLauncher.launch(vSphereCloudLauncher.java:248)
Caused: java.lang.RuntimeException
at org.jenkinsci.plugins.vSphereCloudLauncher.launch(vSphereCloudLauncher.java:268)
at hudson.slaves.SlaveComputer$1.call(SlaveComputer.java:262)
at jenkins.util.ContextResettingExecutorService$2.call(ContextResettingExecutorService.java:46)
at java.util.concurrent.FutureTask.run(FutureTask.java:266)
at java.util.concurrent.ThreadPoolExecutor.runWorker(ThreadPoolExecutor.java:1149)
at java.util.concurrent.ThreadPoolExecutor$Worker.run(ThreadPoolExecutor.java:624)
at java.lang.Thread.run(Thread.java:748)
Still actual!!!
[2017-03-07 21:49:25] [windows-slaves] Starting the service ERROR: Unexpected error in launching an agent. This is probably a bug in Jenkins
java.lang.reflect.UndeclaredThrowableException
at com.sun.proxy.$Proxy56.start(Unknown Source) at hudson.os.windows.ManagedWindowsServiceLauncher.launch(ManagedWindowsServiceLauncher.java:340) at hudson.slaves.SlaveComputer$1.call(SlaveComputer.java:261) at jenkins.util.ContextResettingExecutorService$2.call(ContextResettingExecutorService.java:46) at java.util.concurrent.FutureTask.run(FutureTask.java:266) at java.util.concurrent.ThreadPoolExecutor.runWorker(ThreadPoolExecutor.java:1142) at java.util.concurrent.ThreadPoolExecutor$Worker.run(ThreadPoolExecutor.java:617) at java.lang.Thread.run(Thread.java:745) Caused by: java.lang.reflect.InvocationTargetException at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method) at sun.reflect.NativeMethodAccessorImpl.invoke(NativeMethodAccessorImpl.java:62) at sun.reflect.DelegatingMethodAccessorImpl.invoke(DelegatingMethodAccessorImpl.java:43) at java.lang.reflect.Method.invoke(Method.java:498) at org.kohsuke.jinterop.JInteropInvocationHandler.invoke(JInteropInvocationHandler.java:140) ... 8 more Caused by: org.jinterop.dcom.common.JIException: Service Logon Failure at org.jvnet.hudson.wmi.Win32Service$Implementation.start(Win32Service.java:149) ... 13 more