GPO for Deny Logon Locally

I have multiple users that I want to deny logon capability completely, but I do not want to disable the account.  I have tried to use a GPO with no success.  I followed the following scenario.

Create a Security Group "Deny Logon".
Make user a member of the "Deny Logon" group.

Create a GPO called DenyLogon with the following properties set:
Computer Configuration
        Windows Settings
            Security Settings
                Local Policies/User Rights Assignment
                    Deny log on as a batch job   setting = domain\Deny Logon
                    Deny log on as service         setting = domain\Deny Logon
                    Deny log on locally              setting = domain\Deny Logon
                    Deny log on through Terminal Services  settings = domain\Deny Logon
        Administrative Templates
            System/Group Policy
                    Configure user Group Policy loopback processing mode    Enabled   - Replace

I linked the GPO to the domain.

Problem is user is still able to logon to computers.  What am I doing wrong?
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Pradeep DubeyConsultantCommented:

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Windows Server 2008

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