Network printer works but says "access denied"

This is a very strange situation. A network printer installed from the Server
is accessible by anyone in the department, but when it is viewed it says
"access denied, cannot connect" but it still prints the documents submitted
to it. Also, a local printer installed on a users PC is shared out to be
listed in the directory, but everytime you try to add it to another users PC
it asks for a password. What the heck!!?? It worked fine and now it can't do
anything. It's very frustrating for myself and my boss. All running XP Pro
SP2 on a Server 2003 R2 domain.
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Horsepower