I\'ve been using WIF to authenticate our new website, the STS is based upon the starter-sts implementation.
To enable this to work correctly on out load balanced environ
The intermittent occurrence of your error, combined with the DPAPI exception showing up in your traces suggests to me that you aren't actually overriding the cookie transform, and your service is still using DPAPI.
This might be a long shot, but in your code snippet I noticed your method override "onServiceConfigurationCreated" starts with a lower case o. Such a typo would indeed prevent you from properly overriding default WIF behavior.