PXE-E32 TFTP Timeout Error Trying to PXE Boot With WDS 2008
It took quite a bit of Googling but I found the solution.
The reason for this problem is that MS KB953230 uses the same range of ports as WDS defaults to (64001-65000) for TFTP file transfers so you need to set WDS to use a different port range (62000-63000 works well). This will only occur on a server where you have the DNS role installed as well as WDS (most likely a domain controller).
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