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How to resolve HTTP Error 401.1 caused by group policies?

Here are the points of my scenario:
1. I have a Windows Server 2003 domain
2. I have a member web server (IIS) running Windows Server 2003 Standard, SP2
3. Linked to an OU, is a GPO with a total 99 (ninety-nine) group policy configurations in the "Security Options" and "User Rights Assignments" areas.
4. When I placed the IIS web server into the OU mentioned in point #3, the web application (Track-IT! Web Client) failed with the Internet Explorer error: HTTP Error 401.1 (see attached JPEG).
5. I placed the web server back into its original container, executed a "gpupdate /force" and answered "Y" to the prompt to reboot. BUT...
6. The error remained after the reboot.
QUESTION: How should I resolve this failure?
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1 Solution
Make sure you get a full backup and a system state backup -- preferably with a VSS-aware backup software -- NTBACKUP is fine....

You could try: http://support.microsoft.com/kb/816585
and reapply the default Security Template -- which should wipe any resident GPO's back to installation.
waforbes100Author Commented:
It turns out that the IUSR_COMPUTERNAME account was locked out! What policy could cause that?
There are two IUSR accounts.  One for the domain, and one for the local machine.  Maybe somehow you overwrote one with the other.

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