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DSC: (LocalDirectory.LocalDirectoryProvider) Exception in background directory reader: Logon failure: unknown user name or bad password.

I have a localuser which is part of the administrators and QV administrators group configured for the local directory service, but I'm still getting this error:

10/21/2011 00:03:02.3724212          Warning          (LocalDirectory.LocalDirectoryProvider) Exception in background directory reader: Logon failure: unknown user name or bad password.

Can anyone tell me what I'm missing? Thanks,

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