Nexus 5 won't connect to any available Wi-Fi network. Tried different factory images

I got a Nexus 5 D820 which was stuck in bootloop when I purchased it on eBay (one of the reasons it was cheap).
So long story short, I flashed it with factory image of M preview, and now it boots up and works just fine. It's Bad ESN, so cellular network does not work, but that's okay.

Now I can see all the wi-fi networks in and around my house but when I try to connect it says Wifi Connection Failure. See this image: http://i.imgur.com/poM1RvA.jpg
I have another Nexus 5 running M preview which connects to the network just fine.

Here's the wpa_supplicant file: https://i.imgur.com/X6vq3JD.jpg
Here's the logcat while I tried to connect:

HTML Code:

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[ 01-03 07:15:28.609  899:  899 I/wpa_supplicant ]
wlan0: Trying to associate with 60:fe:20:1b:xx:xx (SSID='ATT362' freq=2437 MHz)
[ 01-03 07:15:29.619  899:  899 I/wpa_supplicant ]
wlan0: CTRL-EVENT-ASSOC-REJECT bssid=60:fe:20:1b:xx:xx status_code=1
[ 01-03 07:15:29.619  899:  899 I/wpa_supplicant ]
wlan0: CTRL-EVENT-DISCONNECTED bssid=60:fe:20:1b:xx:xx reason=3 locally_generated=1
[ 01-03 07:15:29.619  899:  899 I/wpa_supplicant ]
wlan0: CTRL-EVENT-SSID-TEMP-DISABLED id=0 ssid="ATT362" auth_failures=1 duration=10

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Things I have tried:

1. Airplane mode on/off


2. Reboot


3. Different stock ROMs (L, M, KitKat)


4. Flashed KK radio on L 5.1.1

I find it hard to believe that it's an hardware issue because i see the networks just fine. Any pointers, or any one know how to fix this?