ERA 4 HTTP NTLM Authentication not working

We had ERA 3 setup with a http mirror on port 2221 using ntlm authentication. Now all user in active directory could update using their own domain\username and password info.

A uninstalled ERA 3 and did a fresh install of version 4. Now all clients keep prompting for username/password. If I open the browser on the client and open http://server:2221/update.ver I also keep getting prompted for a username/password.

If I disable NTLM authentication then both the client and the browser succeed in getting data from the update server.

FYI: Eset Mail Security is also installed on the server but disabling the protection does not help.