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I had a contract with this sorta of situation. The problem with login credentials was caused by both 2000 and 2003 domain controllers. The admin couldn't not understand it either and was replaced. Expensive Microsoft hotline numbers suggested recreating the account onto the new domain. I had to do it for all users. This is the same company that made history with Microsoft to increase the number of cells in Excel because microcrap think you run "cheap" stuff. This was a corporate-wide project to change a simple domain name for 1,000+ machine and multi-users.
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Sounds like your client is a power user. It could very well be the backup software brute forcing a share drive. Have you checked his print shares? You know...regedit has remote functionality; Maybe you could take a snapshot of the registry before and after the reset to see\compare what's going on. Have you rebuilt the profile on the local machine?
Is this person the only person effected? if so, watch them like a hawk and document. Remind your luser that "they" must work like the other sheeps.
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This is what I have been trying to say but you missed a step.
After you change domains, it will create 2 account id's with the same username but with an appended domain extension. The problem is probably happening when you backup the profile from the old account onto the new one when you use Microcrap solution. That old "DNA" will be imported into the new account -- lockout. You have to be crazy to have Microcrap automate this... it can't copy 1,000 files over if it encounters 1 error and aborts. Plus when copying profiles with their method, it gives the illusion that the computer crashed.... looks bad to a customer who expects you to fail.
With winblows, you have to reboot after making system changes.
just copy: desktop, bookmarks, my documents, some hidden folders in the user's old profile for software. Manual remap those drive mappings and printers.
Do your corporate apps Phone home or looks into a shared folder for updates? That could happen without the user being aware. Could be your software inventory app needs to be adjusted as well.