Problem: I had a problem on one of the Windows 2000 Server which was a member server. Everytime on bootup there would be a service/driver failure error.
In the application log the following error was being reported:
Event ID 7023
The Kerberos Key Distribution Center service terminated with the following error:
The security account manager (SAM) or local security authority (LSA) server was in the wrong state to perform the security operation.
Kerberos Key Distribution is a service that should only be running on DC. Since this is not a DC, microsoft recommends that startup type of this service be disabled.
Please see this MS Knowledgebase article for more info.