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Event ID: 407 Source: DNS

Source
Level
Description
DNS server could not bind a Datagram (UDP) socket to [IP_address]. The data is the error.
Comments
 
This turned out to be applicable in my situation:

Please check if the security update KB951748 is installed on the server. If so, please uninstall it, restart the server and check if the issue goes away. Based on my research, the root cause of the issue is Service Pack mismatch on the server. It causes incompatibility between the security update and SP1 and that's why you encounter this issue.
The DNS server is also a Winsock Proxy Client and the DNS server IP address has not been included in the Proxy Server's Local address table (LAT). You can verify this exclusion by looking at the Msplat.txt in the Proxy Client subdirectory (typically, c:\Mspclnt\Msplat.txt) on the DNS server. See ME200462 to resolve this problem.

See WITP74603 for additional information about this event.
As per Microsoft: "These errors can occur on computers that have both of the following services installed on the same server: Network Address Translation (NAT)and DNS Server". See ME279678 for more details.
According to Microsoft, this problem was corrected in Windows 2000 SP2. See ME260186 for more details.

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