Okay, I'm crying uncle here. I think I've become the victim of windows security I'm not aware of. I'm setting up a rather unique configuration so please look at the diagram.
I've got a terminal server that belongs to network B with an internal subnet different from network A. The terminal server has 2 network adapters, one on each network. Now, when a thin client connected to Network A passes username, password and domain to the terminal server all is peachy. When the PC, however, on the same network but governed by Domain A tries, the credentials fail. It may be worth mentioning that my home PC on my home domain fails as well when connecting to Network A by way of VPN. All computers will authenticate and work find if you're logging into using the local credentials ComputerName\Username but anyone on an existing domain fails when using DomainB\ADUserName. Any thoughts?