OK, this is old news to some, but it seems that this months Patches from Microsoft broke authentication to websites hosted on your domain….
There is a detailed and lengthy thread on Eric’s blog here, so I wont repeat it. But suffice to say, if you are getting unexplained prompts on your IIS server, the answer actually lies on your Domain Controller, not the IIS server….. Simply uninstall KB3002657 from your Domain controller. Reboot, life is good again!