Problem connecting PPro2k3 and Outlook2k3 to PServer2k3 via Windows Auth

[Rob Stewart]

Mixed authentication.
From the server where Project Server2k3 is installed, project pro 2003 and
Outlook 2003 are installed.
From internet explorer and going to PWA, Windows Auth works seamlessly.
However, from Project Pro 2k3 attempting to connect to PServer via Windows
Auth, I get the error that "..the account may not be set up on Project
Server correctly, check with your Proj Serv Administrator -(5003)"

From Outlook, after verifying the Proj Serv credentials are set to Windows
authentication(Tools-Options), and click then try "Import tasks from
project server" we get the error "Login Failed".

Now, if I change the authentication for my account to Project Server Auth,
Project Pro can connect, and Outlook performs as expected without problems.
So, I've ruled out the permission issue (by successfully connecting with
Project Authentication), and ruled out it being simply a windows
authentication issue(as IE can connect and authenticate seamlessly)..so that
leaves:
Outlook 2003 and Project 2003 have problems connecting to Project Server via
Windows Authentication.

Any thoughts?

Thanks,
-RS