I tried unlocking the file since it came from the internet (Right click, Properties) and renaming the file to a shorter name but nothing seemed to help. Google didn't return many results on this error except for the following thread: http://social.msdn.microsoft.com/Forums/en/windowsazuremanagement/thread/84d8df56-1e2e-490d-a293-21a5fbc5b772 In this thread Allen Chen stated that you had to rename the role instance to something less than 28 characters. Even though the name of my role was only 24 characters I made it shorter and yes... Remote Desktop worked! So to make this work you'll need to rename the project(s) that you linked to the Azure project in Visual Studio 2010.