SEP Client Cannot Communicate with SEPM After upgrade from 12.1 to 12.1.5

I have upgraded our SEPM on the SBS 2011 server from 12.1 RU 2 to 12.1 RU 5 about a month ago. I had no problems and after a short break, all the clients (12.1.2) connected back to SEPM. I decided there was no need to upgrade clients to new version at this time. As of this Monday, all the clients (Win7 and Win XP) started crashing their SEP software repeatedly so I decided to start the client upgrade to see if this would resolve the issue. My first test case was Win XP SP3 machine on which I installed the newly created installation package - I did not remove the previous version of the client and just installed over it. After restart, the SEP could not connect to SEPM no matter what I tried. I have exported sylink.xml from SEPM and applied it two different ways - still no communication. I have uninstalled SEP 12.1.5 from this computer and did a clean install - still no communication. I have tried replacing the sylink.xml again - still no communication. It should be a simple upgrade that should not completely destroy to functionality of this software but turns out frustrating as hell. I am out of ideas as I am faced with old clients malfunctioning yet connecting to SEPM or new client nonfunctional and unable to connect to SEPM!