Make sure your PowerShell console is running as Administrator when you try that local connect.
If you're getting that error locally, then Remoting is screwed up on the server. You might try running Disable-PSRemoting, and then Enable-PSRemoting, to unscrew it. However, if it remains screwed up, then it's going to be really difficult for me to help you troubleshoot it over the Internet. I'd honestly suggest opening a product support ticket. Remoting has a lot of moving parts under the hood, and if someone's messed with something, it can take a lot of digging to find it.