UPDATE - as the hotfix was reapplied (accidentally) to the server that was failing, I decided to troubleshoot again. There was a second login accoutn on my server that was specified as domain.local\username. This account was listed in the 'Resource...
Strange... i had the domain name and "\" in place and had to uninstall hotfix before it worked.
Mind that I work with in the 100's of servers and I've only had this problem on one of them thus far; though i can't say what percentage of servers have...