Program fails to start properly with "This implementation is not part of the Windows Platform FIPS validated cryptographic algorithms exception"

I recently came across this problem when running a Dot Net 3.5 application. Uninstall and Reinstall was no success. I finally found a local policy setting that was the problem.

Details:
The Windows environment may be configured to use FIPS encryption that is conflicting with some part of the code in the program you are trying to launch.

To correct this you will need to disable the "Local Security Setting System cryptography: Use FIPS compliant algorithms for encryption, hashing, and signing" policy in Windows.

Go to Start > Control Panel > Administrative tools > Local Security Policy. The Group Policy dialog appears. Under the "Local Policies" heading, select "Security Options" and look for the entry, "System cryptography: Use FIPS compliant algorithms for encryption, hashing, and signing." If this entry is enabled, disable it.


Additionally, open the registry editor, browse to the following path and make sure this registry subkey is set to 0:


HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa\fipsalgorithmpolicy