From a newsgroup post: "In my case the problem started to appear after I had installed Wingate 5.01 client software onto the file server, and had added a second DNS address, where the Wingate server DNS is setup at the gateway. Removing the Wingate client software, removing the second DNS server address (the same as the gateway) and then rebooting resulted in a perfectly functioning DNS domain server. I had installed the Wingate client software so that I could run Windows Update. I had done this because although the file server could access the internet when directly connected (I could ping www addresses from a command prompt), it could not display any pages".
I was getting this event and event id 1008 (same source) plus an error about "Cannot contact Domain" etc. I simply re-applied the GPO manually which seemed to resolve the above errors.
SECEDIT /REFRESHPOLICY MACHINE_POLICY /ENFORCE
SECEDIT /REFRESHPOLICY USER_POLICY /ENFORCE
After applying the above you should get a response in the Event Viewer stating : "SceCli - Security policy in the Group policy objects are applied successfully". Now reboot your machine and the errors should be resolved.