It seems that KSC pushed out KES 11.3 last week (or one of my team did it without updating notes).
We had a couple stations start booting up and not logging on properly. Stations are Windows 7 Pro.
They stated that they couldn’t connect to the “Windows Event Notification Service”.
Searching online I found a post about someone disabling a setting called "Prevent infection during operating system restart" in Kaspersky Internet Security to fix this issue.
I couldn’t find such a setting in KSC policies but switched these stations to the WSEE product and the issue is gone. Posting as an FYI or a bug report for Kaspersky.