Failure Audits after changing ISUR account (event id 680 and 529)

Hi,

I created a new IUSR account as per the following article to help prevent any potential security breach.
http://www.microsoft.com/technet/community/columns/insider/iisi1102.mspx
I set a good password and made the account just like the existing account.
Then i went into IIS manager, right-clicked on 'web sites', selected 'Directory Security' and in there i selected my new account as the new account for anonymous access.

Now i have a huge spam of failure audits on this server in my event logs (event id 680 and 529)
What could be causing these? - they are mainly coming from one other server in particular.

Event Type:    Failure Audit
Source:    Security
Event Category:    Logon/Logoff
Event ID:    529

Logon Failure:
       Reason:            Unknown user name or bad password
       User Name:      
       Domain:            SERVER1
       Logon Type:      3
       Logon Process:      NtLmSsp
       Authentication Package:      NTLM
       Workstation Name:      SERVER2
       Caller User Name:      -
       Caller Domain:      -
       Caller Logon ID:      -
       Caller Process ID:      -
       Transited Services:      -
       Source Network Address:      192.168.1.214
       Source Port:      3876

Category: Account Logon
Event ID 680
NT AUTHORITY\SYSTEM
COMPUTER: SERVER1

Logon attempt by:      MICROSOFT_AUTHENTICATION_PACKAGE_V1_0
 Logon account:      
 Source Workstation:      SERVER2
 Error Code:      0xC0000064


Any help is appreciated.
Thanks in advance