Group Policy Update : Error using GPP - Code 80070005 and 8007071a

Hello Fellow Members

A summary of my windows domain infrastructure is as follows:

1. Windows Server 2003 Domain and Forest Functional Level
2. DC1 - Windows 2012 Standard
3. DC2 - Windows 2003 Standard
4. Client Computers - Mix of Windows XP, Win7 and Win Vista.
5. All users are under CompanyUsers sub OU (categorized based on departments)
6. All Client machines are under ComanyAssets sub OU categorized under Desktop and Laptop Sub OUs.

I am trying to deploy drive mappings using group policy preferences.

1. I create a new GPO. Edited the GPP under User configuration to Map 3 different shares.
2. Linked the GPO to CompanyUsers OU (top Level)
3. No Loopback enabled.
4. GPP set to apply everytime the user logs in.

Result:

1. The Drives map without any issues for a group of users and does not for a majority of other users.
2. The users unable to get the drives mapped are using a mix of XP, win7 and win Vista clients. Therefore the issue is not specific to the version of an OS.
3. The users who are able to get the drives mapped are logging into both the DCs (1 and 2) and therefore ONE specific DC is also not the rootcause.
4. I run Group Policy Update on the Desktop sub OU under CompanyAssets OU and few succeed while other fail with one of the 2 error code : 80070005 - Access Denied and 8007071a - RPC Cancelled.
5. The computers on which the Drives Map succesfully can have any user log-in and the drives map irrespective of who's logged in.
6. The computers on which the Drives DO NOT Map - do not map for any user at all.

Re-configuration:

1. Enabled loopback processing on the GPO.
2. Enabled 'run under logged on user's security context'.
3. Linked the GPO to both the Desktop OU and the CompanyUsers OU.

The set of computers failing to apply the GPO still continue to fail with the same error code.

Any iDEAS ??