LOCALDB 2012 help

Hello everyone. I have a very strange issue. I have a application that is installing a Windows Service that connects to SQLlocaldb 2012 x64. I have several machine that everything works fine and I have other machines same OS Windows 7 same install that I get the following errors. Login Failed for user 'NT AUTHORITY\SYSTEM'. I have compared everything that I know to check on both machine and cannot get the service to start using the local system account. I have goggled and seen several suggestions stating to add the 'NT AUTHORITY\SYSTEM' login to sqlserver. I have tried that and I still get the error. If I change to a local user it works fine. Is there a setting or something I am missing. We are seeing about a 75% success rate with no rhyme or reason. Any help will be greatly appreciated I have beat my head against the wall for 3 days.

Here is the log file for the failed startup. Also on the machines that work the 'NT AUTHORITY\SYSTEM' users is not added to SQL logins.

2015-11-03 16:26:54.31 Server Microsoft SQL Server 2012 - 11.0.5058.0 (X64)
May 14 2014 18:34:29
Copyright (c) Microsoft Corporation
Express Edition (64-bit) on Windows NT 6.1 (Build 7601: Service Pack 1)

2015-11-03 16:26:54.31 Server (c) Microsoft Corporation.
2015-11-03 16:26:54.31 Server All rights reserved.
2015-11-03 16:26:54.31 Server Server process ID is 3924.
2015-11-03 16:26:54.31 Server System Manufacturer: 'Dell Inc.', System Model: 'Latitude E6400'.
2015-11-03 16:26:54.31 Server Authentication mode is MIXED.
2015-11-03 16:26:54.31 Server Logging SQL Server messages in file 'C:\Windows\SysWOW64\config\systemprofile\AppData\Local\Microsoft\Microsoft SQL Server Local DB\Instances\v11.0\error.log'.
2015-11-03 16:26:54.31 Server The service account is 'WORKGROUP\ROBERT-PC$'. This is an informational message; no user action is required.
2015-11-03 16:26:54.31 Server Command Line Startup Parameters:
-c
-S "MSSQL11E.LOCALDB"
-s "LOCALDB#64CDE4F6"
-d "C:\Windows\SysWOW64\config\systemprofile\AppData\Local\Microsoft\Microsoft SQL Server Local DB\Instances\v11.0\master.mdf"
-l "C:\Windows\SysWOW64\config\systemprofile\AppData\Local\Microsoft\Microsoft SQL Server Local DB\Instances\v11.0\mastlog.ldf"
-e "C:\Windows\SysWOW64\config\systemprofile\AppData\Local\Microsoft\Microsoft SQL Server Local DB\Instances\v11.0\error.log"
2015-11-03 16:26:54.55 Server SQL Server detected 1 sockets with 2 cores per socket and 2 logical processors per socket, 2 total logical processors; using 2 logical processors based on SQL Server licensing. This is an informational message; no user action is required.
2015-11-03 16:26:54.55 Server SQL Server is starting at normal priority base (=7). This is an informational message only. No user action is required.
2015-11-03 16:26:54.55 Server Detected 4083 MB of RAM. This is an informational message; no user action is required.
2015-11-03 16:26:54.55 Server Using conventional memory in the memory manager.
2015-11-03 16:26:54.63 Server Node configuration: node 0: CPU mask: 0x0000000000000003:0 Active CPU mask: 0x0000000000000003:0. This message provides a description of the NUMA configuration for this computer. This is an informational message only. No user action is required.
2015-11-03 16:26:54.63 Server Using dynamic lock allocation. Initial allocation of 2500 Lock blocks and 5000 Lock Owner blocks per node. This is an informational message only. No user action is required.
2015-11-03 16:26:54.66 Server Software Usage Metrics is disabled.
2015-11-03 16:26:54.66 spid7s Starting up database 'master'.
2015-11-03 16:26:54.72 spid7s 4 transactions rolled forward in database 'master' (1:0). This is an informational message only. No user action is required.
2015-11-03 16:26:54.72 spid7s 0 transactions rolled back in database 'master' (1:0). This is an informational message only. No user action is required.
2015-11-03 16:26:54.72 spid7s Recovery is writing a checkpoint in database 'master' (1). This is an informational message only. No user action is required.
2015-11-03 16:26:54.74 Server CLR version v4.0.30319 loaded.
2015-11-03 16:26:54.78 Server Common language runtime (CLR) functionality initialized using CLR version v4.0.30319 from C:\Windows\Microsoft.NET\Framework64\v4.0.30319.
2015-11-03 16:26:54.95 spid7s Service Master Key could not be decrypted using one of its encryptions. See sys.key_encryptions for details.
2015-11-03 16:26:55.00 spid7s SQL Server Audit is starting the audits. This is an informational message. No user action is required.
2015-11-03 16:26:55.00 spid7s SQL Server Audit has started the audits. This is an informational message. No user action is required.
2015-11-03 16:26:55.05 spid7s SQL Trace ID 1 was started by login "sa".
2015-11-03 16:26:55.05 spid7s Server name is 'ROBERT-PC\LOCALDB#64CDE4F6'. This is an informational message only. No user action is required.
2015-11-03 16:26:55.05 spid11s Server local connection provider is ready to accept connection on [ \.\pipe\LOCALDB#64CDE4F6\tsql\query ].
2015-11-03 16:26:55.05 spid11s Dedicated administrator connection support was not started because it is disabled on this edition of SQL Server. If you want to use a dedicated administrator connection, restart SQL Server using the trace flag 7806. This is an informational message only. No user action is required.
2015-11-03 16:26:55.05 spid11s SQL Server is now ready for client connections. This is an informational message; no user action is required.
2015-11-03 16:26:55.05 spid7s Failed to verify Authenticode signature on DLL 'C:\Program Files\Microsoft SQL Server\110\LocalDB\Binn\ftimport.dll'.
2015-11-03 16:26:55.05 spid9s Starting up database 'mssqlsystemresource'.
2015-11-03 16:26:55.19 spid9s The resource database build version is 11.00.5058. This is an informational message only. No user action is required.
2015-11-03 16:26:55.19 spid7s Starting up database 'msdb'.
2015-11-03 16:26:55.61 spid9s Starting up database 'model'.
2015-11-03 16:26:55.73 spid9s Clearing tempdb database.
2015-11-03 16:26:56.65 spid9s Starting up database 'tempdb'.
2015-11-03 16:26:56.83 spid14s The Service Broker endpoint is in disabled or stopped state.
2015-11-03 16:26:56.83 spid14s The Database Mirroring endpoint is in disabled or stopped state.
2015-11-03 16:26:56.95 spid7s Recovery is complete. This is an informational message only. No user action is required.
2015-11-03 16:26:56.95 spid14s Service Broker manager has started.
2015-11-03 16:26:56.98 Logon Error: 18456, Severity: 14, State: 5.
2015-11-03 16:26:56.98 Logon Login failed for user 'NT AUTHORITY\SYSTEM'. Reason: Could not find a login matching the name provided. [CLIENT: ]
2015-11-03 16:26:57.03 Logon Error: 18456, Severity: 14, State: 5.
2015-11-03 16:26:57.03 Logon Login failed for user 'NT AUTHORITY\SYSTEM'. Reason: Could not find a login matching the name provided. [CLIENT: ]
2015-11-03 16:31:56.96 Server The RANU instance is terminating in response to its internal time out. This is an informational message only. No user action is required.
2015-11-03 16:31:56.96 Server SQL Server shutdown has been initiated
2015-11-03 16:31:56.96 spid10s SQL Trace was stopped due to server shutdown. Trace ID = '1'. This is an informational message only; no user action is required.

Here is the log on a machine that works.

2015-11-03 09:02:21.93 Server Microsoft SQL Server 2012 - 11.0.5058.0 (X64)
May 14 2014 18:34:29
Copyright (c) Microsoft Corporation
Express Edition (64-bit) on Windows NT 6.1 (Build 7601: Service Pack 1)

2015-11-03 09:02:21.93 Server (c) Microsoft Corporation.
2015-11-03 09:02:21.93 Server All rights reserved.
2015-11-03 09:02:21.93 Server Server process ID is 1748.
2015-11-03 09:02:21.93 Server System Manufacturer: 'Dell Inc.', System Model: 'Latitude E6440'.
2015-11-03 09:02:21.93 Server Authentication mode is MIXED.
2015-11-03 09:02:21.93 Server Logging SQL Server messages in file 'C:\Windows\SysWOW64\config\systemprofile\AppData\Local\Microsoft\Microsoft SQL Server Local DB\Instances\v11.0\error.log'.
2015-11-03 09:02:21.93 Server The service account is 'WORKGROUP\JUSTIN-LAPTOP$'. This is an informational message; no user action is required.
2015-11-03 09:02:21.93 Server Command Line Startup Parameters:
-c
-S "MSSQL11E.LOCALDB"
-s "LOCALDB#453004AE"
-d "C:\Windows\SysWOW64\config\systemprofile\AppData\Local\Microsoft\Microsoft SQL Server Local DB\Instances\v11.0\master.mdf"
-l "C:\Windows\SysWOW64\config\systemprofile\AppData\Local\Microsoft\Microsoft SQL Server Local DB\Instances\v11.0\mastlog.ldf"
-e "C:\Windows\SysWOW64\config\systemprofile\AppData\Local\Microsoft\Microsoft SQL Server Local DB\Instances\v11.0\error.log"
2015-11-03 09:02:22.11 Server SQL Server detected 1 sockets with 2 cores per socket and 4 logical processors per socket, 4 total logical processors; using 4 logical processors based on SQL Server licensing. This is an informational message; no user action is required.
2015-11-03 09:02:22.11 Server SQL Server is starting at normal priority base (=7). This is an informational message only. No user action is required.
2015-11-03 09:02:22.11 Server Detected 16289 MB of RAM. This is an informational message; no user action is required.
2015-11-03 09:02:22.11 Server Using conventional memory in the memory manager.
2015-11-03 09:02:22.14 Server Node configuration: node 0: CPU mask: 0x000000000000000f:0 Active CPU mask: 0x000000000000000f:0. This message provides a description of the NUMA configuration for this computer. This is an informational message only. No user action is required.
2015-11-03 09:02:22.15 Server Using dynamic lock allocation. Initial allocation of 2500 Lock blocks and 5000 Lock Owner blocks per node. This is an informational message only. No user action is required.
2015-11-03 09:02:22.15 Server Software Usage Metrics is disabled.
2015-11-03 09:02:22.15 spid4s Starting up database 'master'.
2015-11-03 09:02:22.21 spid4s 7 transactions rolled forward in database 'master' (1:0). This is an informational message only. No user action is required.
2015-11-03 09:02:22.23 spid4s 0 transactions rolled back in database 'master' (1:0). This is an informational message only. No user action is required.
2015-11-03 09:02:22.23 spid4s Recovery is writing a checkpoint in database 'master' (1). This is an informational message only. No user action is required.
2015-11-03 09:02:22.29 Server CLR version v4.0.30319 loaded.
2015-11-03 09:02:22.33 spid4s SQL Server Audit is starting the audits. This is an informational message. No user action is required.
2015-11-03 09:02:22.33 spid4s SQL Server Audit has started the audits. This is an informational message. No user action is required.
2015-11-03 09:02:22.35 Server Common language runtime (CLR) functionality initialized using CLR version v4.0.30319 from C:\Windows\Microsoft.NET\Framework64\v4.0.30319.
2015-11-03 09:02:22.35 spid4s SQL Trace ID 1 was started by login "sa".
2015-11-03 09:02:22.36 spid4s Server name is 'JUSTIN-LAPTOP\LOCALDB#453004AE'. This is an informational message only. No user action is required.
2015-11-03 09:02:22.36 spid11s Server local connection provider is ready to accept connection on [ \.\pipe\LOCALDB#453004AE\tsql\query ].
2015-11-03 09:02:22.36 spid11s Dedicated administrator connection support was not started because it is disabled on this edition of SQL Server. If you want to use a dedicated administrator connection, restart SQL Server using the trace flag 7806. This is an informational message only. No user action is required.
2015-11-03 09:02:22.36 spid11s SQL Server is now ready for client connections. This is an informational message; no user action is required.
2015-11-03 09:02:22.36 spid4s Failed to verify Authenticode signature on DLL 'C:\Program Files\Microsoft SQL Server\110\LocalDB\Binn\ftimport.dll'.
2015-11-03 09:02:22.36 spid9s Starting up database 'mssqlsystemresource'.
2015-11-03 09:02:22.37 spid9s The resource database build version is 11.00.5058. This is an informational message only. No user action is required.
2015-11-03 09:02:22.39 spid4s Starting up database 'msdb'.
2015-11-03 09:02:22.43 spid9s Starting up database 'model'.
2015-11-03 09:02:22.44 spid4s 1 transactions rolled forward in database 'msdb' (4:0). This is an informational message only. No user action is required.
2015-11-03 09:02:22.48 spid4s 0 transactions rolled back in database 'msdb' (4:0). This is an informational message only. No user action is required.
2015-11-03 09:02:22.54 spid9s Clearing tempdb database.
2015-11-03 09:02:22.72 spid9s Starting up database 'tempdb'.
2015-11-03 09:02:22.84 spid14s The Service Broker endpoint is in disabled or stopped state.
2015-11-03 09:02:22.84 spid14s The Database Mirroring endpoint is in disabled or stopped state.
2015-11-03 09:02:22.84 spid14s Service Broker manager has started.
2015-11-03 09:02:22.91 spid4s Recovery is complete. This is an informational message only. No user action is required.
2015-11-03 09:02:22.99 spid52 Starting up database 'Tracs'.
2015-11-03 09:09:12.91 Server The RANU instance is terminating in response to its internal time out. This is an informational message only. No user action is required.
2015-11-03 09:09:12.91 Server SQL Server shutdown has been initiated
2015-11-03 09:09:12.91 spid10s SQL Trace was stopped due to server shutdown. Trace ID = '1'. This is an informational message only; no user action is required.