Can't login to Microsoft Account/Reset Surface RT and can't sign in to Microsoft account/Can't connect to Microsoft Services

I have reset my Surface RT before. Being an IT professional, I have installed Windows 7/8/10 multiple times. Just reset my Surface RT to default settings. I am trying to set it up for my daughter. She has a hotmail account already (uses it on our other computers). When I try to sign her in when setting up Windows after the hard reset I get an error that it can't connect to Microsoft Services and i should check my network settings. I created a local account thinking it must be something during setup. I tried again via the Store app and I receive the same error. I have an internet connection so.... That's not the problem. It is clearly something on Microsoft's end. Creating a new account isn't an option as she is using her current account on our home PC and needs to utilize OneDrive. Is there an image that has Surface RT Update 3?