ERROR: The kerberos subsystem encountered a PAC verification failure.

You cannot log on or you experience a long delay on a domain controller or on a member computer that is running Windows 2000, Windows XP, or Windows Server 2003

Symptom:

Includes Group policy not applying.

AND

The following error message is logged in the system event log:

Event Type: Error
Event Source: Kerberos
Event Category: None
Event ID: 7
User: N/A
Description: The Kerberos subsystem encountered a PAC verification failure. This indicates that the PAC from the client in realm had a PAC which failed to verify or was modified. Contact your system administrator.
Data: 0000: c0000192

Resolution: See link below

Vendor link: http://support.microsoft.com/kb/883268