IIS7 Loopback Issue and the FIM Portal

This issue is nothing new, but it did bite me when setting up a FIM 2010 RC1 portal under a custom URL, so I thought I would share.  When accessing the FIM portal from another server or workstation, integrated authentication worked fine, but when accessing it from the FIM server itself, you were prompted for authentication 3 times, and then ultimately denied.  With security auditing enabled, a logon failure was shown in the Event Log (see below).  From there, I came across this blog post which discusses an IIS change introduced in Server 2003 SP2 (aka the IIS loopback issue).  That post also mentions this KB article, which works for Server 2008 even if it doesn’t say so.

Log Name:      Security
Source:        Microsoft-Windows-Security-Auditing
Date:          1/11/2010 12:17:00 PM
Event ID:      4625
Task Category: Logon
Level:         Information
Keywords:      Audit Failure
User:          N/A
Computer:      computer.domain.loc
Description:
An account failed to log on.

Subject:
    Security ID:        NULL SID
    Account Name:        -
    Account Domain:        -
    Logon ID:        0x0

Logon Type:            3

Account For Which Logon Failed:
    Security ID:        NULL SID
    Account Name:        username
    Account Domain:        domain

Failure Information:
    Failure Reason:        An Error occured during Logon.
    Status:            0xc000006d
    Sub Status:        0x0

Process Information:
    Caller Process ID:    0x0
    Caller Process Name:    -

Network Information:
    Workstation Name:    COMPUTER
    Source Network Address:    192.168.1.1
    Source Port:        63846

Detailed Authentication Information:
    Logon Process:       
    Authentication Package:    NTLM
    Transited Services:    -
    Package Name (NTLM only):    -
    Key Length:        0

This event is generated when a logon request fails. It is generated on the computer where access was attempted.

The Subject fields indicate the account on the local system which requested the logon. This is most commonly a service such as the Server service, or a local process such as Winlogon.exe or Services.exe.

The Logon Type field indicates the kind of logon that was requested. The most common types are 2 (interactive) and 3 (network).

The Process Information fields indicate which account and process on the system requested the logon.

The Network Information fields indicate where a remote logon request originated. Workstation name is not always available and may be left blank in some cases.

The authentication information fields provide detailed information about this specific logon request.
    - Transited services indicate which intermediate services have participated in this logon request.
    - Package name indicates which sub-protocol was used among the NTLM protocols.
    - Key length indicates the length of the generated session key. This will be 0 if no session key was requested.
Event Xml:
<Event xmlns="http://schemas.microsoft.com/win/2004/08/events/event">
  <System>
    <Provider Name="Microsoft-Windows-Security-Auditing" Guid="{54849625-5478-4994-a5ba-3e3b0328c30d}" />
    <EventID>4625</EventID>
    <Version>0</Version>
    <Level>0</Level>
    <Task>12544</Task>
    <Opcode>0</Opcode>
    <Keywords>0x8010000000000000</Keywords>
    <TimeCreated SystemTime="2010-01-11T17:17:00.019Z" />
    <EventRecordID>72842</EventRecordID>
    <Correlation />
    <Execution ProcessID="680" ThreadID="772" />
    <Channel>Security</Channel>
    <Computer>computer.domain.loc</Computer>
    <Security />
  </System>
  <EventData>
    <Data Name="SubjectUserSid">S-1-0-0</Data>
    <Data Name="SubjectUserName">-</Data>
    <Data Name="SubjectDomainName">-</Data>
    <Data Name="SubjectLogonId">0x0</Data>
    <Data Name="TargetUserSid">S-1-0-0</Data>
    <Data Name="TargetUserName">username</Data>
    <Data Name="TargetDomainName">domain</Data>
    <Data Name="Status">0xc000006d</Data>
    <Data Name="FailureReason">%%2304</Data>
    <Data Name="SubStatus">0x0</Data>
    <Data Name="LogonType">3</Data>
    <Data Name="LogonProcessName">
    </Data>
    <Data Name="AuthenticationPackageName">NTLM</Data>
    <Data Name="WorkstationName">computer</Data>
    <Data Name="TransmittedServices">-</Data>
    <Data Name="LmPackageName">-</Data>
    <Data Name="KeyLength">0</Data>
    <Data Name="ProcessId">0x0</Data>
    <Data Name="ProcessName">-</Data>
    <Data Name="IpAddress">192.168.1.1</Data>
    <Data Name="IpPort">63846</Data>
  </EventData>
</Event>