The following error appears in the gsa log:
CreateProcess error=1816, Not enough quota is available to process this command
This indicates a shortage of virtual memory.
Strangely, the same start command works correctly if executed via the scheduler. In fact, it will also work correctly if you remote desktop to the machine and run it from the desktop.
Following the chef knife windows wiki here: http://wiki.opscode.com/display/chef/Knife+Windows+Bootstrap
It seems like there is another relevant setting:
"
Bootstrap commands can take longer than the WinRM default 60 seconds to complete, bump to 30 minutes:
C:\Users\Administrator> winrm set winrm/config @{MaxTimeoutms="1800000"}
"
Maybe this is relevant?