Windows 8.1 RDP Virtual Memory Error

I just upgraded to Windows 8.1 and am encountering the same problem as mentioned here:

http://social.technet.microsoft.com/Forums/lync/en-US/068228a3-78da-4bcf-acb5-3cf5c63dee48/windows-81-preview-remote-desktop-failing-with-low-virtual-memory-error?forum=w81previtpro

I am trying to use RDP desktop version to connect to a site (which uses RD Gateway). It says "Initiating Connection" and then fails with no error or any notification (there is nothing in the event viewer)

If I try changing settings (removing sound from RDP, reducing resolution) I eventually get this message:

[Window Title]
Remote Desktop Connection

[Content]
This computer can't connect to the remote computer.

The problem might be due to low virtual memory on your computer. Close your other programs, then try connecting again. If the problem continues, contact your network administrator or technical support.

Connection worked fine on Windows 8 - is this a known 8.1 bug? It is pretty critical for me!

Thanks