smbpasswd issues

[Ian Cameron]

I am running Samba 2.04b on an HPUX D370 Server and connecting with NT
workstations (sp5).

I have used mksmbpasswd to transfer the user accounts and set them
temporarily to null passwords=yes and used '...NO
PASSWORDXXXXXXXX.....'. Now when I go to set the user's password with
smbpasswd (through rlogin xterm window) I get the following:

machine 127.0.0.1 rejected the session setup. Error was : code 131.
Failed to change password for *user*

(hosts allow = 123.xxx.xxx.,456.xxx.xxx.,localhost)

Of course when I remove 'localhost' I get the following:

machine 127.0.0.1 rejected the tconX on the IPC$ share. Error was :
ERRSRV - ERRbadpw (Bad password - name/password pair in a Tree Connect
or Session Setup are invalid.).
Failed to change password for *user*

Can someone please tell me if I have missed a step somewhere...

I can change the passwords as root and all the Shares work properly.

==smb.conf==
[global]
        workgroup = ******
        encrypt passwords = Yes
        null passwords = Yes
        os level = 34
        preferred master = Yes

Thanks,
Ian Cameron
Engineering Systems Administrator
Knoll, Inc