if its accepting the username and password then it simply has to be the intranet zone, are you absolutely sure you have the server prompting for credentials in your intranet zone?
When it prompts, it will have the Username and Password, but there will be the server name in the blue title bar of the pop up
so if you look at the following image
http://seer.entsupport.symantec.com/docs/images/289744/fig1.jpg
It says "Connect to server.local" that is the EV Server name that you need to add to your intranet zone, so make sure that you have it listed properly within IE, don't just rely on what the policy has set etc
just as a matter of interest though if the user DOES use a proxy, does it work?
https://www.linkedin.com/in/alex-allen-turl-07370146