The eventviewer reports:

iSCSI discovery via SendTargets failed with error code 0xefff0009 to target portal *192.168.xxx.xxx 0003260 Root\ISCSIPRT\0000_0 .

The MS website (http://msdn.microsoft.com/en-us/libr...(v=vs.85).aspx) only explains that it is an Authentication Failure

This is regardless the OS (tried Win 7 and 2008 R2) or machine (tried 2 physical machines and 2 virtual machines)...