The peer's stratum is less than the host's stratum??? That's weird. You're the peer, time.windows.com is the host... the way NTP is supposed to work is that there are certain "stratum-1" time servers that are directly connected to an authoritative time
source like an atomic clock or a GPS; any machine that syncs to these stratum-1 servers are considered stratum-2 machines; any machine that syncs to those is a stratum-3 machine... and so on, and so forth.
If time.windows.com is higher stratus than your machine, something's very odd.
After looking at it in Wireshark, I think I see why. Time.windows.com is saying that its stratum is 0 (Unspecified or unavailable). A working time server (I synced to time-b.nist.gov) is stratum 1. This also may be of interest:
Reference Clock ID: NULL
Reference Clock Update Time: Feb 23, 2007 18:18:47.0627 UTC
And this friendly little error, indicated in the flags byte of the NTP reply (don't see why Windows doesn't show this as the error rather than the one it does):