Error authenticating during environment generation

Folks,

I'm using 7.1.2 and I'm trying to use the environment generation wizard. I am trying to connect to an existing cell. When I enter the OS user name and password, I try to verify and I get this error:
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Failed to connect:com.ibm.rational.rafw.wsadmin.RafwException: Error Connecting to "XPPROAGENT1" Caused by: com.ibm.tivoli.remoteaccess.RemoteAccessAuthException: CTGRI0000E Could not establish a connection to the target machine with the authorization credentials that were provided.

Unable to connect to: XPPROAGENT1
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I have also tried with the machine name of XPPROAGENT1.ambler.com and the IP address.
No change. (I even added entries in the hosts file for XPPROAGENT1)
I can ping XPPROAGENT1 from the RAFW MC machine without issues. The user name and password are correct because I can log into XPPROAGENT1 with those credentials just fine.

What I don't understand is if the error means:
1) It can't GET to XPPROAGENT1
or
2) It can get to XPPROAGENT1 but it can't log in.

I have a BF agent on XPPROAGENT1 and I can do the telnet 5555 test from the rafw server just fine.

Any ideas why the authentication fails? In both cases each machine is a VM image
RAFW 7.1.2 is installed on an XP SP2 image
the target machines is also an XP SP2 image.

Thanks

Andy