This problem can also occur if the computer account is not created correctly. Move the computer to a workgroup and back to the domain again. Be sure the computer account is in the right OU. This allows the computer (when authenticated) to be added to the authenticated users group.
A logon script assigned through a GPO tried to connect to a network share, but the user did not have the permission to access the resource. Therefore, the script requested authentication from that user. However, the user was unable to see the request because it happened before the desktop was loaded. In this case, the logon process waits until the script times out.
A newsgroup post suggests installing MS hotfix ME329457
A script that was assigned to a Group Policy Object did not run within the timeout period and was terminated.