Windows 2003 server acting as a member server for a SBS 2003 premium server

Hey everyone

In location 1 I have a windows 2003 sbs. This is the domain controller, and the only server on location 1. I have installed a second server (windows 2003 standard edition), on a second site. This is a member server on the domain, that will just act as a file server for location 2. The setup is working fine when the vpn between the two sites is functioning. But when the vpn goes down, the users in location 2 are no longer able to access the shares on the server that is on the same site as them.

When a user tries to access the share. It prompts them to log in. And if you attempt to do so, an error message appears, stating

logon unsuccessful:
The user name you typed is the same as the user name you logged in with. That user name has already been tried. A domain controller cannot be found to verify that user name.

Is this even possible to achieve?

Any thoughts/ ideas would be greatly appreciated. Unfortunately, at the moment upgrading the sbs server is not an option.

Thanks in advance