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NTLM fails with active directory IIS 8.5 Windows Server 2012. Successful for Administrator

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Has anyone had trouble with IIS 8.5 Windows Server  2012, NTLM authentication type.

Our web service returns HTTP 500 when we try to connect as a domain user. It tries with negotiate and ntlm. When we connect as domain user, it returns Http 401.2 401.2, 500

When we connect as Administrator it returns Http 401.2 401.2, 200

What should I do to fix the problem?. Anonymous access is disabled. We did not have this problem before .Net 4.5 and Server 2012.(atleast our users have complained of the issue after upgrade to .Net 4.5)

Has Microsoft changed something w.r.t NTLm and active directory?


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