We had a similar issue yesterday, and I saw this post last night. We were able to make it work. We found that by disabling the SCSI Disk Device in the Device Manager, or simply removing the plastic protector from the SD slot (accomplishing the same thing), the encryption is able to view the disk partition information. Once that happens, the disk begins encrypting as it should. We are still in the process of testing, to determine the full scope and if we need to manually disable the SCSI drive (We don't use SD cards), or if it will work with an actual SD card installed.
Tried your solution to remove the paltic protector and EEPC installs and works as expected. I can then insert a SD card and it works as expected. Tried replacing the plastic protector then booting and although the machine boots and pre-boot works Endpoint is again unable to determine disc partitions and reports an error. Booting with a SD card in the slot pre-boot and Encryption Client Status works as normal.
Just need to decide a way forward now either dump the bit of plastic or disable the SCSI drive.
Considering an email to Michael Dell - "Please ensure all plastics supplied by Dell in the future are Win XP compatible"
Many thanks for sharing this one I would never have thought of removing that bit of plastic.