Are you running snapshot or transactional replication. I have tried everything to get this going including working with MS Support.

I am working with Management Studio. I tried just running the create publication stored proc on the publisher and got the same error.

Publisher is 2000 build 2040 and the distributor is 2005 service pack 2.

we also have to follow NIST requirements and use strong encryption when authenticating. NTLMv2(Kerberos). MS Support told me this is a known issue that they won't fix until service pack 3.

Odd, I wonder if this guy just did not know what he was talking about. If I use a 2000 distributor, everything works fine.