log in issue

Running an xserve OS 10.5.8, Had to change permissions the other day to keep students from getting into all of our files stored. Not sure I hit the right thing. Had one as other, listed as read and write. Got rid of that and it now keeps the students from seeing everything. Problem seems on the log in. The students can't home sync anymore, and when they go to log in from a different computer I get an error saying log in there is an error. Our laptops are set to look for 10.3.40.5 which is the server. But when I'm looking at the Workgroup manager it is showing the /LDAPv3/127.0.0.1. Wondering if this is causing the issue? Any suggestions would be helpful.