The issue was one of those obscure things that I dont think I would have ever found without help&. The Shared Services Application pool was set for 4 web garden worker processes but Excel Services is limited to only 1 so the setting has to be 1. The second I changed this, everything started working. It was literally a 30 second change.
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by: Gideon7Posted on 2008-09-09 at 08:43:14ID: 22428674
Make sure that there is not a firewall blocking the Kerberos ports (88 TCP and 88 UDP). If the servers are running Windows Firewall check that too.
However, the errors you describe don't appear to be security (Kerberos) related. "File not found" is a basic error in locating a file. An error from Kerberos would be something like "Access denied" or "User not found".