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Very strange MS Office 2003 hang when opening files from sharepoint webdav folders

I have a very strange issue with opening files shared from Sharepoint 2003 via webdav.

When opening MS Office files ie word, powerpoint etc via windows explorer on XP SP2 This causes the application to hang plus also locks down the network connection, forcing a reboot as unable to kill MS Word.
this only happens with IE7 installed and is intermitent for random directories on the webdav folders.
If Word or Powerpoint is open prior to double clicking on the file in explorer, the file opens successfully, Office hangs only if the application is not running prior to opening the document.
If IE6 is installed the documents all open fine.
If trying to open the documents via the IE6 or IE7 web browser then the documents open fine.

Files that are served from Sharepoint 2003 via webdav on MS Server 2003 R2 box.
Authentication is via NTLM.
From what i inderstand it seems to be an authenication issue with IIS and webdav with the webdav xml header not passing the credentials.
Any help would be much appreciated in resolving the problem.

Part of the IIS log file from the webdav below
2008-07-01 00:38:10 W3SVC1678326834 PROPFIND /_vti_bin/owssvr.dll - 80 - Microsoft-WebDAV-MiniRedir/5.1.2600 401 2 2148074254
2008-07-01 00:38:10 W3SVC1678326834 PROPFIND /_vti_bin/owssvr.dll - 80 - Microsoft-WebDAV-MiniRedir/5.1.2600 401 1 0
2008-07-01 00:38:10 W3SVC1678326834 PROPFIND /_vti_bin/owssvr.dll - 80 SYD-DOM1\pwepah Microsoft-WebDAV-MiniRedir/5.1.2600 207 0 0

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Hi Glenna
We only have Office 2003 installed with only one version of the OWSSUPP.DLL and that being 11.0.8164.0 which I believe comes with SP3 for Office 2003. Found in C:\Program Files\Microsoft Office\OFFICE11

I'm a bit relunctant to install a hotfix for Office 2007 over the top of our 2003 install as the symptoms are not quite the same. As I can open the documents via IE7, just not through explorer when IE7 is installed.
I would recommend you read this whitepaper:

Understanding and troubleshooting the SharePoint Explorer View (

It talks about slowness and things to check for.
Why don't you try the hotfix on a single PC and see if it fixes the problem?  I believe installing IE7 installs the component in question even if you don't have Office 2007 or the Compatibility Pack installed and Windows Explorer and Internet Explorer are closely linked.
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I've tried the install and it comes back with a message " There are no products affected by this package installed on this system."
Was worth a shot though.
Weird,did you say you've applied all office updates?
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I have the latest and greatest patches etc of everything to no avail.

thanks for the link, it has given me a great understanding but hasn't help solved my issue.

Still getting hangs in word.
After installing IE7, did you verify that the Trusted Sites still has the URL of your SharePoint server listed?
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Yes it still has the Url in the Trusted Sites.
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Sorry Local Intranet, rather than Trusted Sites
Could you run a network monitor between the client and the server to see if you see anything unusal occurring? If you do not have a network monitor, Wireshark is a good one to use:
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I've run wireshark. the results are in the zip file, I'm not great at reading these.

There are two files, one when there is a failure and a hang, the other when successfully opening the document.
the one that was successful has MS Word 2003 open prior to trying to open the file via webdav.

the files being opened are in the c3/bls/document library/group - weekly minutes webdav folders
I'm experiencing the same exact problem and I have the exact setup as you.  I would love to know the fix for this.

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Still have no actual fix, we have rolled everyone back to use IE 6 for now.
I, too am having the same problem. We've been having it for a while, although in our case it only seems to affect MS Word files. Excel seems unaffected.

I have some additional clues to add:
1. The problem happens *only* when we do not already have an instance of Word 2003 running and we double click on a SharePoint file accessed through UNC path.
2. To clarify #1: If there is already an instance of Word running, the problem does not happen.
3. Our sharepoint server is running in a Virtual Server 2005 R2 machine, with Windows Server 2003 R2 as the host OS for SharePoint. This server is only hosting SharePoint. The physical host box for Virtual Server is running 64 bit Windows Server 2003 R2 on dual quad core Xeons with a gig of RAM devoted to each vm.
4. The problem doesn't happen if we open a Word file through the IE SharePoint interface. However, we mostly use UNC paths to get to our SharePoint files.
5. We are current on all Office 2003 patches.
6. The problem is happening on every machine that accesses Word files via SharePoint through UNC.
7. Killing the instance of Winword.exe through taskmanager usually restores normal network function. Sometimes a full machine reboot is required.
8. Adding the UNC path to IE trusted sites doesn't solve the problem (tried it just now)
9. The above mentioned hotfix doesn't apply to my system.
I think that Microsoft has hosed this up through their may releases of KB.  I did a rebuild to see where it might of broke at and it didn't break.  I then compared updates that were applied to the broken build to the working build.  It looks like MS took out some KBs that was applied to the broken build versus the working build.
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Sunshineknox, You're right. MS have posted three hotfixes relating to the problem I'm having. I've narrowed it down to IE7 not detecting Intranet sites. Here are the links to the MS KBs.

WinXP SP3 has all these updates included and I suspect a Cumulative Update for IE7 may also have them. I haven't applied these updates but there is another workaround which is to uncheck 'Automatically Detect Intranet Sites' and leave the 3 options checked in the Intranet Zone settings.

Will post further updates when I have one.
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Setting IIS authentication to NTLM worked for me also.
The fix was:

C:\Inetpub\AdminScripts\adsutil.vbs set w3svc/NTAuthenticationProviders "NTLM"