Hello, I have same problem...
I was having an update issues with my server so I wiped my drive and did a fresh clean install on a stand alone box I have from the "Basic Server Install - Windows". Server works as far as I can tell. I can log in fine with a client on same machine but from another computer on my local LAN I get the 1017 error. I can log in see the server but when I hit connect server just disconnects client. I have tried to ping the server and I get a response. I tried to remove all firewalls and it did not help. Tried both local log in and the EMU one same result. Also I have gone down the list on forums and tried all the threads (<chatserver> removed the IPs from the <host> ) and all the others I found but still same result. I am sure I am missing something trivial but I can think of anything more to try.
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