When Application Manager (User Rights Management) is used to elevate the rights of regedit.exe to those of a local administrator and an attempt is made to load a registry hive file, the error
Insufficient privilegesis returned and the hive does not load.
The Restore privilege is required as per http://technet.microsoft.com/en-us/library/cc974921.aspx
In the User Rights Management Policy being used to elevate regedit.exe, set the state of the SeRestorePrivilege privilege to "Enable"
When troubleshooting issues that may be privilege related, add all privileges temporarily as "Enable" and see if the problem is solved. If it is not solved, the issue is not caused by privileges. If it is solved, you need to find which privilege(s) is required and just have these in the URM policy.