Don't know if it will help but I was getting the same error "..Payload not encrypted..." and the reason was that a php error was being generated somewhere along the way and that was what was not encrypted.
You may want to try turning debugging on to see if an error is being generated.
Moodle networking (MNet)
Payload not encrypted
This discussion has been locked because a year has elapsed since the last post. Please start a new discussion topic.