Access Denied error - when setting trust between NT4 and 2003 domains

I am trying to setup a two-way trust between Nt4 and 2003 domains.  I am unable to do this becuase I am getting Access Denied error when I try from NT4 domain.  

I can map a drive from NT4 to access 2003 domain
I can PING servers from either domains
I am using LMHOSTS file
I have WINS

I am not sure what I am doing wrong here.

Any help is appreciated.

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First, make sure that you have the right info in your LMHOSTS file -

The entry for the W2003 DC that has the PDC emulator FSMO role must contain #PRE #DOM:W2003DOMAIN at the end of the line (where "W2003DOMAIN" is the NetBIOS name of the 2003 Domain).
There must be plenty of space characters (not tabs) between the name and the #PRE, because a NetBIOS name can be 16 characters long.
You have to load the LMHOSTS contents into the NetBIOS cache - froma command prompt, run NBTSTAT /R  (note that the /R is CaSe Sensitive)
Check the contents of the cache by running NBTSTAT /c  (note that the /c is CaSe Sensitive).

Now create a connection from the NT4 Domain to IPC$ on the 2003 DC that has the PDC emulator FSMO role, using admin credentials. ie

net use \\W2003PDC\IPC$ /user:W2003DOMAIN\Administrator /password:XYZ

Then you should be able to establish the trust.

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Might be that anonymous access is restricted in the W2k3 domain. In addition, make sure your lmhosts file is setup correctly.
Check these articles:

How to establish trusts with a Windows NT-based domain in Windows Server 2003

How to Write an LMHOSTS File for Domain Validation and Other Name Resolution Issues

Client, service, and program incompatibilities that may occur when you modify security settings and user rights assignments
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Windows Server 2003

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