thanks for the suggestion.
The 64bit box was checked and is a good idea. It's bit me once before and I was surprised to realize its importance.
I looked at the other article you sent which is also good to know but that apparently wasn't the problem either.
I had tried another test script that just ran a get-host and dir command and it also failed so it definitely looks like a problem launching powershell itself.
The plan now is to visit the PC and try launching powershell interactively and if ok, update powershell from v2 to v4/WMF 4.0.