I had considered that but since the other servers didn't do this I dismissed it. But now that you mention it, there are about 10 users logged into this one and not the others. Maybe something they are doing is preventing services.exe from getting the word. Maybe it is something different about 2008. The article you posted doesn't mention what Windows version it is referring to but it has a link to setting environment variables in Windows 2000 so it looks old. Still, it is a good find. It's pretty hard to find relevant articles with words like 'system' and 'server' and 'variable' in the search terms.

I'll try rebooting in a few minutes after everyone logs out.

Update: I rebooted and now the System account sees all the environment variables. Thanks.