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Domain Authentication Issue -- Logon Failure: Unknown user name or bad password

I have a domain with two DCs running Windows Server 2003, and one Terminal Server (also running Win2K3), with 20 Windows XP clients. One of the DCs is the Primary DNS server.

A few of our laptop users (running WindowsXP SP3) have had trouble reconnecting to our domain after being away from our network.  After returning, they connect to the network, and they appear log onto the domain successfully (without any error messages). But then they encounter authentication problems. For example, when they try to open a folder on a persistently-mapped network drive, they receive an error dialog that states: "Logon Failure: Unknown user name or bad password". The only workaround is to disconnect the persistently-mapped network drives, and then remap them. Also, the first time they open Outlook (which is on Exchange 2003), they are required to enter their username and password.

We checked the network activity on the adapter and it was fine. We have tried rebooting, but this doesn't make any difference. No errors are being recorded in the DC's Security Event log. The DNS settings appear fine, and the affected laptops were able to ping other computers on the network.  It seems to be a specific Windows authentication issue.

The problem is a bit sporadic, so I haven't been able to isolate a cause.  I was wondering if anyone had some suggestions about how I can keep this from happening, as my boss is one of the affected users!
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Avatar of Darius Ghassem
Darius Ghassem
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I can add that while the users are in this state (logged in but not able to open network drives), they can still log into the Terminal Server and use it, with no authentication issues. So, the problem may be localized to the client laptops.  btw, the Windows user profiles are set to Local on the laptops.
Are the laptops part of the domain?
Thanks for the suggestion to reset the secure channel. I will try this the next time I encounter this error, and let you know the results.  Yes, the laptops are part of the domain.  
I realize I haven't updated this question in a while.  The problem hasn't resurfaced, so I haven't been able to try resetting the secure channel to see if this has any affect. If I learn anything else, I'll let you know.
Thanks, dariusg for the potential solution. This problem has only occurred a few times, but I will keep this solution in mind for those rare occasions.