Exchange 2007 autodiscover not working inside network

The Problem: autodiscover not properly working on internal domain with non-domain laptop and Outlook. User keeps getting prompted for password inside Outlook and password not taking causing account to get locked out (due to lock out policies).

The Setup: 2 Windows 2003 servers. 1 server is the root domain controller and file server, the other server is Exchange 2007 with all the latest updates. Domain joined workstations in the office using Outlook are fine. Problems with NON domain laptops using autodiscover both inside and outside of the office.

I spent 10 hours on this last night and finally got autodiscover working properly outside of the office. When this user brings his non domain laptop into the office and uses Outlook, it fails again, prompts the user for the password, password does not work and locks out the user account. The corporate policy only allows 3 invalid login attempts before lockout with forced manual reset.

In Outlook sometimes there are multiple password prompts, 1 prompt for mail.domainname.com, and additional password prompt for autdiscover.domainname.com. Sometimes even a prompt for server.domain.local. The client can connect to the first prompt with his password and use email. However shortly thereafter autodiscover.dmainname.com password prompt pops up > password doesn’t work > user is locked out of account.

We have a trusted UCC SSL certificate installed for:
NetbiosServerName
server.domain.local
mail.domainname.com
autodiscover.domainname.com
autodiscover.domainname.local

Host A record for autdiscover.domainname.com is configured in external DNS to point to WAN IP and forward internally
Host A and PTR record configured with internal DNS for autodiscover.domainname.com > LAN IP of Exchange mail server.

I am only having the lockout (password prompt) problem with 1 user specifically. I was having this problem for this user externally until I resolved the problem this morning. Now it only seemed to be a problem when the user is working in Outlook 2007 on the internal network with a NON joined domain laptop.

Commands Output:

Get-ClientAccessServer
Name
----
EXCHANGE

Get-outlookprovider
Name                Server              CertPrincipalName   TTL
----                ------              -----------------   ---
EXCH                exchange                                                          1
EXPR                                    msstd:mail.domainname.com  1
WEB                                                                                             1

Test-OutlookWebServices | fl   (Notice the errors)
Id      : 1003
Type    : Information Message : About to test AutoDiscover with the e-mail address Administrator@domainname.com.
Id      : 1007
Type    : Information Message : Testing server server.domain.local with the published name https:/ /server.domain.local/EWS/Exchange.asmx & https://mail.domainname.com/EWS/Exchange.asmx.
Id      : 1019
Type    : Information
Message : Found a valid AutoDiscover service connection point. The AutoDiscoverURL on this object is https://server.domain.local/Autodiscover/Autodiscover.xml.
Id      : 1006
Type    : Information
Message : The Autodiscover service was contacted at https://server.domain.local/Autodiscover/Autodiscover.xml.
Id      : 1016
Type    : Success
Message : [EXCH]-Successfully contacted the AS service at https://server.domain.local/EWS/Exchange.asmx. The elapsed time was 31 milliseconds.
Id      : 1015
Type    : Success
Message : [EXCH]-Successfully contacted the OAB service at https://server.domain.local/EWS/Exchange.asmx. The elapsed time was 0 milliseconds.
Id      : 1014
Type    : Success
Message : [EXCH]-Successfully contacted the UM service at https://server.domain.local/UnifiedMessaging/Service.asmx. The elapsed time was 31 milliseconds.
Id      : 1013
Type    : Error
Message : When contacting https://mail.domainname.com/EWS/Exchange.asmx received the error The request failed with HTTP status 401: Unauthorized.
Id      : 1016
Type    : Error
Message : [EXPR]-Error when contacting the AS service at https://mail.domainname.com/EWS/Exchange.asmx. The elapsed time was 31 milliseconds.
Id      : 1015
Type    : Success
Message : [EXPR]-Successfully contacted the OAB service at https://mail.domainname.com/EWS/Exchange.asmx. The elapsed time was 0 milliseconds.
Id      : 1014
Type    : Success
Message : [EXPR]-Successfully contacted the UM service at https://mail.domainname.com/UnifiedMessaging/Service.asmx. The elapsed time was 31 milliseconds.
Id      : 1017
Type    : Success
Message : [EXPR]-Successfully contacted the RPC/HTTP service at https://mail.domainname.com/Rpc. The elapsed time was 0 milliseconds.
Id      : 1006
Type    : Success
Message : The Autodiscover service was tested successfully.
Id      : 1021
Type    : Information
Message : The following web services generated errors.
 As in EXPR
Please use the prior output to diagnose and correct the errors.

get-autodiscovervirtualdirectory |fl
Name                          : Autodiscover (Default Web Site)
InternalAuthenticationMethods : {Basic, Ntlm, WindowsIntegrated}
ExternalAuthenticationMethods : {Basic, Ntlm, WindowsIntegrated}
BasicAuthentication           : True
DigestAuthentication          : False
WindowsAuthentication         : True
MetabasePath : IIS://server.domain.local/W3SVC/1/ROOT/AutodiscoverPath: D:\ProgramFiles\Exchsrvr\ClientAccess\Autodiscover
Server                        : EXCHANGE
InternalUrl                   :
ExternalUrl                   :
AdminDisplayName              :
ExchangeVersion               : 0.1 (8.0.535.0)
DistinguishedName             : CN=Autodiscover (Default Web Site),CN=HTTP,CN=Protocols,CN=EXCHANGE,CN=Servers,CN=Exchange Administrative Group (FYDIBOHF23SPDLT),CN=Administrative Groups,CN=name NE,CN=Microsoft Exchange,CN=Services,CN=Configuration,DC=domain,DC=local
Identity                      : EXCHANGE\Autodiscover (Default Web Site)
Guid                          : 7a7fe343-490e-453d-9883-c5b24c7a417a
ObjectCategory                : domain.local/Configuration/Schema/ms-Exch-Auto-Discover-Virtual-Directory
ObjectClass                   : {top, msExchVirtualDirectory, msExchAutoDiscoverVirtualDirectory}
WhenChanged                   : 2/29/2008 4:23:53 PM
WhenCreated                   : 2/29/2008 4:223:47 PM
OriginatingServer             : server.domain.local
IsValid                       : True