Google broke the live stream system again with their latest update, but this will fix it until VLC has a new update.
Replace the installed youtube.luac File in the VLC-Directory.
1) Download this new youtube.luac file.
2) Copy of the new youtube.luac File in the VLC-Install Directory “C:\Program Files (x86)\VideoLAN\VLC\lua\playlist” this is where it will be if you did not change the default location when installed.
5) Close and restart the Ad Server software or Desktop Control Panel and now you can use live streamed youtube links again.