Binding osx Lion client to OSX Lion OD

Hi,

If I bind my OSX Lion client to OSX Lion OD using the unauthenticated method (users & groups>login Options>edit, and add the server) it works fine. A network user can log in. However, if I try using the authenticated route (users & groups>login Options>edit>open Directory Utility>edit LDAPv3>new>add server) I get an error saying the credentials were incorrect. I know for sure the credentials are correct because, from the same client I use the same user (diradmin) and password to authenticate to the directory when using WGM or server admin. It is a clean install of OSX Lion server, and the server appears to be working well, especially with profile manager.

I have also tried specifing an IP address rather than hostname but to no avail.

DNS servers are running on 2008 servers. I have performed lookups and all appears to be well.

I know this must be something to do with my set up at work and not OSX Lion because I set up a test lab at home today and it binds successfully as one would expect. The only difference is, I have enable DNS services on my lab OSX server.

I am looking for some advice on how to troubleshoot this.

Thanks in advance