I was facing this error in one of my servers while trying to open gpedit, with additional message “The volume for a file has been externally altered so that the opened file is no longer valid”.
Here is how I fixed it.
1) Enable view hidden files from explorer.
2) Navigate to C:\Windows\System32\GroupPolicy\Machine
3)Rename the file Registry.pol to something else.
4) Run gpupdate
By now, I was able to open gpedit normally.
Note that by doing this, whatever polices in the local group policy settings will be gone. There will only be settings from the domain policy. So if you have made any local policy changes, they need to be re-done.