Hi HomerJ,
I have recently experienced the issue you are experiencing with other clients, Since ALM 12.2x, the patches are now all complete installers. The idea is that you can then install directly from the patch and have the latest updates installed upon completion without the need to install the GA release and then patch afterwards. What is supposed to happen is that the when running the patch scans the system for previously installed versions and then uninstalls previous versions if they exists and then installs the full patched version after the system is clean of prior versions. What is believe is that something is happening with the uninstall portion on patch 1 (the other patches don't seem to experience these issues). Although the project reports that it uninstalled the prior version and completed the installation, I believe that something is still remaining behind as the hosting portion doesn't seem to host for anything outside of the local system.

What I have found is that by stopping the services and then going into the installed programs section and uninstalling all the ALM related applications and then restarting the server (the entire Windows server and not just the services), to insure that the caches are cleaned and the uninstalled portions cleaned up and reset, then running the patch and installing directly from that, all system are then installed and completed correctly and the hosting starts as it should.

Try this and see if it helps with your issue,
Dan