I ran into a strange authentication problem in IIS on Windows Server 2003 SP1.  The website is configured for integrated authentication only.  I can authenticate and access the website no problem from any workstation on the network.  But from the console, I cannot access the website--it gives me a 401.1 HTTP error.  Strange.  The server can talk to the domain because I logged into the machine.  DNS looked good.

I ran across this little utility called AuthDiag.  http://www.microsoft.com/downloads/details.aspx?FamilyId=E90FE777-4A21-4066-BD22-B931F7572E9A&displaylang=en

AuthDiag directed me to a strange error message in the security logs, which led me to this KB article.

http://support.microsoft.com/default.aspx?scid=kb;en-us;896861

Specifically from the article...

This issue occurs if you install Microsoft Windows XP Service Pack 2 (SP2) or Microsoft Windows Server 2003 Service Pack 1 (SP1). Windows XP SP2 and Windows Server 2003 SP1 include a loopback check security feature that is designed to help prevent reflection attacks on your computer. Therefore, authentication fails if the FQDN or the custom host header that you use does not match the local computer name.

I decided to go with option 1 and set DisableLoopbackCheck to 1 and this fixed my problem.