Windows cannot query for the list of Group Policy objects. A message that describes the reason for this was previously logged by the policy engine.

and

Windows cannot access the file gpt.ini for GPO CN={31B2F340-016D-11D2-945F-00C04FB984F9},CN=Policies,CN=System,DC=<domain name>,DC=com. The file must be present at the location <\\<domain name>\sysvol\<domain name>\Policies\{31B2F340-016D-11D2-945F-00C04FB984F9}\gpt.ini>. (<error description>.). Group Policy processing aborted. 

Cause:
Various

Fix:

This is a common problem these errors usually will log cyclically every 5 minutes

*****Do this first*****

On the Server in question

1. Start > Run > cmd {enter}
2. Issue the following commands

dfsutil /purgemupcache {enter}
gpupdate /force {enter)

3. Wait for the above to finish if it asks for s reboot select NO
4. Click Start > run > eventwvr.msc
5. Select the application log - ensure there is an Event ID 1704 which shows that group policy has been successfully applied.
6. Wait 5 Minutes to make sure the problem has ceased.

Ref: http://support.microsoft.com/kb/887303

*****If the above does not fix it then continue with these*****

Make sure the server has SP1 installed at least.

1. Start > run > services.msc {enter}
2. Locate the following services ensure they are all started and the startup type is set to automatic.
A. Dfs Service
b. TCP.IP Netbios helper service
3. Now Click Start > Run > dsa.msc {enter} Active directory users and computers should start.
4. Right click your domain name > Properties >Group Policy
5. Locate the default domain Policy > Right Click Edit
6. Navigate to Computer Configuration\Windows Settings\Security Settings\Local Policies\User Rights Assignment
7. Locate “bypass traverse checking” and ensure this right has been has been granted to the “Everyone Group”
8. Ensure the Servers Anti Virus Software is NOT scanning the sysvol directory (in McAfee Right click the shield > virus scan console > On Access

Scan > Right Click > Properties > All processes > Detection tab > Exclusions > Add browse > c:\windows\system32\sysvol
9. Look at the corresponding 1058 Error it will say something like "network path not found" or "access is denied" and it will give you the name or

the GPO it cannot process.
31B2F340-016D-11D2-945F-00C04FB984F9 is the default domain policy you can find it here

\\domain_controller_name\SYSVOL\coniston.co.uk\Policies\{31B2F340-016D-11D2-945F-00C04FB984F9}
Note: Authenticated users should have Read and Execute, List Folder Contents and Read to this directory.
10. Reinstall and reset group policy
Warning this will replace the default domain policy and the default domain controller policy with a factory settings clean one.
Start > Run > cmd {enter} > issue the following command > >dcgpofix /target:BOTH {enter} > When prompted answer Y for yes.
At This Point clear the logs and reboot – if the error persists do the following
11. http://support.microsoft.com/kb/325356 (Warning this involves downtime please do it out of hours.

Also See http://support.microsoft.com/kb/842804

Comments:
http://support.microsoft.com/kb/887303
http://support.microsoft.com/kb/842804
http://support.microsoft.com/kb/325356