Event ID 16: Windows Update Client ignoring proxy settings

PROXYwindows-update

Have a couple of locked down, standalone Windows 2008 R2 servers (not on a domain; no WSUS) that refuse to adhere to the proxy settings each morning at around 4:25AM EST with what I'm assuming is a probe to check for updates:

Unable to Connect: Windows is unable to connect to the automatic updates service and therefore cannot download and install updates according to the set schedule. Windows will continue to try to establish a connection.

Funny thing is, the "you have updates" balloon always appears when there's indeed updates and "Check for Updates" always works fine. It's just some errand, scheduled probes that ignore the proxy for some reason, hits the firewall, and emails me an alert.

Really would like to quiet this down, but I'm at a loss as to where/why that's happening. Is there a bit I can flip in the registry to tell it to stop?

EDIT

Proxy is configured manually through Internet Explorer and as I've said, works fine.

netsh winhttp show proxy returns the correct proxy settings as well.

Best Answer

You could use Group Policy. Though the machine isn't part of a domain you can still set Policy's via GPEDIT.MSC. May I suggest the following:

Set the "Make proxy settings per-machine (rather than per user)" to Enabled. This setting is located under Computer Configuration\Administrative Templates\Windows Components\Internet Explorer.

Now setup your proxy settings in IE. These settings will be applied in the HKLM hive so they will be used system-wide. Now all services can use these settings.