Bingo, I've been affected also (cost me some gray hair). I auto-upgraded
from edgy to feisty and am running into this exact problem. It's present
in Samba version 3.0.24-2ubuntu1.1. Commenting out line "msdfs proxy =
no" resolves the issue.

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samba 3.0.24 on feisty is broken
https://bugs.launchpad.net/bugs/95460
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