Ran into the same issue with latest Appium 1.0.2.beta and the May 6th release of WinAppDriver.
Got it working by getting an MD5 of the new WinAppDriver.exe binary and changing that value in the install.js file (both lib and build versions) at Appium installation path/node_modules/appium-windows-driver/lib/install.js and Appium installation path/node_modules/appium-windows-driver/build/lib/install.js
I believe this is an integration bug between latest Appium and WinAppDriver 