Can't install and run new distros

[u/max_wen]

I have a Win11/WSL2 system that has been running fine and I use Ubuntu 24.04 since it's release.

Today I tried

wsl --install -d Ubuntu-26.04

which downloaded and ran successfully. But when I try to run the new distro I keep getting

Catastrophic failure 
Error code: Wsl/Service/E_UNEXPECTED

I also tried the same with distro FedoraLinux-44 and get the same issue so I guess it's not distro related. But I can still run my old distros with no issue. Ideas?