SMB issues with Win7 on 2003 R2 Domain

Hi,
I am trying to track down an issue am having with Win7 when browsing and copying files to my shares hosted on a Win2k3 R2 file server.

When I copy large files (over 1mb) to any root of target folders on my DFS (using DFS-R), I receive the following error: 0x8007003B An unexpected network error occurred. (was copying Wildlife.wmv file found in shared videos). However if I then go into a sub directory and try to copy the file it works.

I've used wireshark to capture SMB traffic during the attempted file transfer to a root folder target:

3696 4.705854   172.16.0.1           172.16.1.103          SMB      Trans2 Response, QUERY_FILE_INFO, Error: STATUS_INVALID_HANDLE

3697 4.706245   172.16.1.103          172.16.0.1           SMB      Trans2 Request, QUERY_FILE_INFO, FID: 0x0000, Query File Standard Info

 3698 4.706634   172.16.0.1           172.16.1.103          SMB      Trans2 Response, QUERY_FILE_INFO, Error: STATUS_INVALID_HANDLE

 3699 4.707221   172.16.1.103          172.16.0.1           SMB Pipe WaitNamedPipe Request

3700 4.707404   172.16.0.1           172.16.1.103          SMB      Trans Response, Error: STATUS_OBJECT_NAME_NOT_FOUND

3708 5.792863   172.16.1.103          172.16.0.1           SMB      NT Create AndX Request, FID: 0xc001, Path: \home\Wildlife.wmv

I’ve also noticed errors with SMB on the root of a target folder on my DFS shares that results in SMB not settling, it will just keep looping UNLESS I try to copy something resulting in the error mentioned above:

No.    Time        Source               Destination          Protocol Info

 377 40.236911  172.16.1.103          172.16.0.1           SMB      Trans2 Request, FIND_FIRST2, Pattern: \home\*

 379 40.238204  172.16.0.1           172.16.1.103          SMB      Trans2 Response, FIND_FIRST2, Files: . .. Admin Files - Tools Backup CCTV Databases desktop.ini DfsrPrivate Documents English ISOs Koala.jpg Misc Orders Techies Space Thumbs.db Vids WDS Imaging

382 40.240577  172.16.0.1           172.16.1.103          SMB      Close Response, FID: 0x800c

383 40.258657  172.16.1.103          172.16.0.1           SMB      NT Cancel Request

384 40.259438  172.16.0.1           172.16.1.103          SMB      NT Trans Response, FID: 0x4001, NT NOTIFY, Error: STATUS_CANCELLED

385 40.259771  172.16.1.103          172.16.0.1           SMB      Close Request, FID: 0x4001

386 40.260230  172.16.0.1           172.16.1.103          SMB      Close Response, FID: 0x4001
No.     Time       Source               Destination          Protocol Info

 387 40.269847  172.16.1.103         172.16.0.1           SMB      Trans2 Request, QUERY_FILE_INFO, FID: 0x0000, Query File Standard Info

388 40.270629  172.16.0.1           172.16.1.103          SMB      Trans2 Response, QUERY_FILE_INFO, Error: STATUS_INVALID_HANDLE

389 40.274032  172.16.1.103          172.16.0.1           SMB      Trans2 Request, QUERY_FILE_INFO, FID: 0x0000, Query File Standard Info

 390 40.274831  172.16.0.1           172.16.1.103          SMB      Trans2 Response, QUERY_FILE_INFO, Error: STATUS_INVALID_HANDLE

391 40.275176  172.16.1.103          172.16.0.1           SMB Pipe WaitNamedPipe Request

392 40.275627  172.16.0.1           172.16.1.103          SMB     Trans Response, Error: STATUS_OBJECT_NAME_NOT_FOUND

I do not receive this looping problem if I go into a sub menu and I can copy large files like the wildlife.wmv without any errors.

I’ve tried this on a fresh install of Win7 Pro and currently running the beta of service pack 1 (from which these results are from); the server is running service pack 2.

Any ideas?
Michael