Environment: W2K8 SP2 Terminal Server with loopback 'Merge' policy in place

I have set the GPO to Restrict All Drives in the 'Hide these specified drives in My Computer' policy setting; however when I log into the TS and go to My Computer I still see them.

When I run GP Results against the user and terminal server it says the winning gpo is the gpo that is restricting (hiding all drives).

I thought I might be able to see the setting in the registry so I did some googling and found the registry path HKEY_CURRENT_USER\Software\Microsoft\Windows\Curre ntVersion\Policies\Explorer
supposedly there should be a key in here called NoDrives that has a decimal number associated with it that will hide the necessary drives. When I look in that registry location logged in as that user I do not see the key 'NoDrives'. Is this the right key and location for this GPO?

I also have the Prevent Access to Drives from My Computer set and that works just fine. I cannot figure out why it the hiding is not working.

Can someone help me with this?

Thanks inadvance.