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I have a two-way, non-transitive trust between two forests and domains, "W2003" and "W2008".

In W2008 I have a GPO with user settings linked to a machine OU containing machine "Server". The GPO applies to Authenticated Users.

Cross-forest loopback processing is enabled in merge mode.

When I log onto Server as User (whose account exists in the W2003 domain), the GPO does not apply.

I run RSoP and see that the GPO is "Denied" for the reason "Inaccessible." The GPO name is not listed, but the GUID is.

I have checked the file-level permissions on the DC to ensure that User has access to read the GPO's folder and all its contents.

What is going on?

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I found a workaround by copying the policy folder from the DC where the GPO lives to the DC in the domain my user is logging in from. –  j.rightly Jul 12 '11 at 16:17
    
So you copied the policy folder from one sysvol to the other domain's sysvol? Did you export/import the GPO in GPMC, or just copy the folder directly? –  SturdyErde Jan 31 '12 at 20:58
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