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Problems during new user profile creation process on Win2k

I just upgraded an NT 4.0 server to Windows 2000. The problem is if a domain user ID who has never logged on before tries to do so locally, the console locks up at the "Loading your personal settings" window and the server is completely locked up, requiring a power switch reboot. Then, if the same user ID tries to log on locally a second time (and from then on), there is no problem.

There appears to be some kind of problem during the new user profile creation process. I enabled verbose logging to userenv.log. The last thing that shows up before the lockup is "USERENV(e8.cc) 07:19:12:109 CopyProfileDirectoryEx: Reconcile Directory Done for all Directories." The C: drive is FAT. I've installed SP3 with all recommended hotfixes from Windows Update. Do you know what might be happening?
Try renaming the ntuser.dat file in the Default User profile directory to ntuser.old, then logging on with a new user and allowing the .dat file to recreate itself. Any changes that you made to the default profile will be lost. All usual caveats regarding editing/deleting system files apply -- make sure you have a good backup, etc.

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