Firstly, this is a WSUS problem specifically so you're likely to find better answers in Technet and from those forums.
We do have this KB article that shows WSUS error codes (not all, and not always provides resolution, but can provide some additional information):
Additionally I did find some resources from the Microsoft forums (and with the research from the above KB) that make me suggest a fix, first the resources:
The proposed fix: Check your GPO to make sure the port is included. Server 2012, and 2016 WSUS port is now 8530 or 8531 if using SSL. If you just put in HTTP(S)://<hostname or IP address> and no port then that is likely the problem. This is suggested as the resolution from the first article with the same error code as one you mentioned receiving.
I am also seeing the exact same issues with Server 2016. I can go outbound from WSUS (Windows update) and have no issues patching the exact same server. I have port 8530 defined in my GPO, so that is clearly not the problem, and my Server 2012R2 servers are working just fine.
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Solution was simple - it was an duplicated sid error. After deployment we run our sid-reset-script from network share which failed wihtout any error.
After copy to local and run again plus one reboot the Servers did Show up fine.
-- solved --
So did you use a template? Trying to figure out how you had duplicated sid? I am having the same issue even after changing the SID, not to mention my machines are not joined to the domain...