Domain logins fail after making Terminal Server a domain controller

From: RJDE (rettema(remove_this)_at_hotmail.com)
Date: 05/19/04 

Date: Wed, 19 May 2004 14:41:02 -0700

I have a SBS2k3 server as the PDC and a second Win2k3 Std. server running Terminal Services. TS licensing was also running on the Terminal Server. I added the Domain Controller role to the Terminal Server and changed the Log on Locally GPO according to KB247989 - specifically, I added users to the Remote Desktop Users group and added this group the Allow Logon Locally and to the Allow Logon Through Terminal Services GPOs. Users can log in just fine through Remote Desktop, but only Administrator can log into a workstation in the Domain. The message from the logon attempt at a domain workstation is "The local policy of this system does not permit you to logon interactively" None of the domain users are assigned to Deny logon locally. What am I missing?

Thanks for any help you can provide.