UE 5.6 project creation fails on Default.rc2 / rc.exe — exit code -1

You can try forcing your SDK version in your buildconfiguration xml file

Your project path\Saved\UnrealBuildTool\BuildConfiguration.xml

<?xml version="1.0" encoding="utf-8" ?>
<Configuration xmlns="https://www.unrealengine.com/BuildConfiguration">
   <WindowsPlatform>
<WindowsSdkVersion>10.0.22621.0</WindowsSdkVersion>
</WindowsPlatform>
</Configuration>

5.6 compiles ok on vs 2022 (v17.14.5)