As per Microsoft: "This event record indicates that there is either a network access server (NAS) or RADIUS proxy problem. The person with administrative rights on the computer will not be able to resolve this problem". See MSW2KDB
for additional information about this event.
This happend because we used an old version of Merit RADIUS (2.4.21 I think) we have tried with newer version and everything seems ok.
You may also see this event when trying to authenticate from a linux client using radcheckpasswd.
A malformed request could be encountered because of network, software or hardware related problems.
If you have a lot of such messages, may be an indication of a cracking attempt. An attacker could construct and send specially crafted packets in order to disrupt your server.