[Samba] Problem with security=server

[Robert Misior]

Hello,

I have  just upgraded two of our servers from samba 2.0.7 to 2.2.5 and
now I'm having a hard time getting my setup to work again.  Server #1
has all user account information server #2 is only a file/print server.
In smb.conf on server #2  security=server and password server = NetBIOS
name of server #1.   Server #1 is set up as a domain controller with
security=user.  Whenever server #2 tries to authenticate user on server
#1 the new smbd process that starts is capable of using 98% of the cpu,
it never finishes on its own and authentication is never successful.

Please let me know if I'm missing something. I also attached parts of
smb.conf files from both servers.
Thanks,
Robert

Server #1 smb.conf

[global]
    workgroup = salem
    netbios name = STUDENT_SERVER
    update encrypted = yes
    encrypt passwords = no
    smb passwd file = /usr/local/samba/save/smbpasswd
    password level = 10
    security = user
    username level = 10
    log level = 8
    log file = /var/log/samba/log.%m
    max log size = 50
    domain logons = yes
    os level = 32
    preferred master = yes
    domain master = yes


Server #2 smb.conf

[global]
        workgroup = TEST
        netbios name = STUDENT
        server string = Salem College Print Server
        security = server
        update encrypted = Yes
        password server = 172.16.101.100
        log level =8
        password level = 10
        username level = 10
        log file = /var/log/samba/log.%m
        max log size = 50
        add user script = /usr/sbin/useradd %u -d /home/%u -s
/user/bin/noshel
        domain logons = Yes
        os level = 32
        preferred master = Yes
        domain master = Yes
        dns proxy = No