1. Installed UR12, everything looked great
2. Performed an iisreset
3. Could no longer connect with Plugin Registration tool, Visual Ribbon editor etc.
4. Ran a trace on the failed connections which shows the following error
System.IO.FileLoadException: Could not load file or assembly 'Microsoft.Crm.Core.WebServices, Version=5.0.0.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35' or one of its dependencies. Either a required impersonation level was not provided, or the provided impersonation level is invalid. (Exception from HRESULT: 0x80070542)> at Microsoft.Crm.Sdk.V5.DiscoveryService.Execute(DiscoveryRequest request)
5. Confirmed that identities running that app pools have all required access.
6. Checked the GAC and only SdkTypeProxy and SdkTypeProxy.XmlSerializers are registered, which is normal.
7. Updated to UR13 and problem still applies.