We where having a similar problem after we set DominoValidateRedirectTo to 1 but not on all our sites.
To diagnose the problem I checked the source of the login pages for our sites where it was working and where it was not. All the sites had the $$_vrds=<token> but on the sites where it worked the URL was a relative reference with an absolute path, and on the site where we got the Invalid URL exception it was an absolute URI.
To be clear this is an relative reference where it would work:
/sales/orders.nsf&$$_vrd2=token
this is an absolute URI where is would not work:
http://apps.company.com/sales/orders.nsf&$$_vrd2=token
We started looking for differences between the set up for these sites. We disregarded the login form as it is a simple modification of the default from domcfg.nsf and the same form is used on sites that work and do not. In one instance we have two sites running on the same Domino server but with different internet site documents, one works and one does not. The main difference between them is the site that works was set to redirect all TCP to SSL where the site that does not work is only set to force login on SSL.
Our conclusion is that when "Force login on SSL" is set to "Yes" the redirectTo value in the login form is an absolute URI. This makes sense as it allows the login to use HTTPS but switch back to HTTP afterwards. The problem is that DominoValidateRedirectTo seems to fail with absolute URIs.
To work around the problem we have found you can either set the entire site to use HTTP (security department would not be pleased) or set the entire site to use HTTPS.