This is one of the more bizarre situations I've encountered and any help would be appreciated GREATLY. Here's the scenario:
We have several computers on a development network, all running Windows Server 2003 w/ SP1. They've been running SP1 for a while and some of the hotfixes that came after it, but no new patches have been installed in several weeks. The new patches are downloaded every night, if any, but they are not automatically installed. The machines are not used to browse the Internet and no unauthorized software is allowed on them, plus they have appropriate scanners running, so the chance of a virus or spyware is minimal. Everything has been working great for quite some time. Nothing that I know of has recently changed EXCEPT for the installation of AuthDiag 1.0 from Microsoft on two of the machines TODAY.
Shortly after the installation of AuthDiag, one of the machines was rebooted. Note that this was NOT one of the machines that AuthDiag was installed on (however, one of the machines on which it WAS installed was also later "afflicted"). When it attempted to come back up, it hung at "Applying Computer Settings" and would never proceed past this point. During troubleshooting, another machine was rebooted. It too seemed to take a while to finish the "Applying Computer Settings", but at that stage it presented the message that a service had failed. Upon checking, it was determined that the "Network Connections" service did not start. Attempts to start this service manually also failed with a timeout. After opening the Network Connections pane (right-click My Network Places > Properties) NO network connections were found. Suspecting a pattern, two more machines were rebooted with the exact same results - slow to pass "Applying Computer settings, Network Connections service failure, and no connections shown in the Network Connections pane.
AuthDiag was removed and some preliminary research on the Net seemed to indicate SP1 as a potential culprit, as did another employee who suggested the same thing, so as an experiment SP1 was removed from two of the machines and they were rebooted, at which time the network connections were restored. However, this is kind of a drastic step and I'd like to find out more about WHY this occurred if I can, so I decided to try this forum on the chance that maybe someone else has seen something like this before.
Note that I'm not pointing at AuthDiag, or even SP1, as a definitive culprit. All I know at this point is that these entities happened to coincide with the start of the problem or are otherwise potentially related to the problem in some fashion, as described. So if anyone can shed some light on this strange and highly-irritating issue, I would definitely appreciate it. I would like to put SP1 back on so I can stay current with security updates, but at this point I don't know if that can be done. Due to the bizarre nature of the problem and the fact that our development system is pretty important, I'm assigning 500 points.