The "Authentication Failure" message returned from the Test Credential in Discovery can be misleading. This error message could be either 1) credential issue or 2) block port issue. When I troubleshoot Windows Authentication errors, I always validate the credential first and then validate the WMI ports second.
Even though you could use WBEMTest for troubleshooting, it requires WMI ports to be open to be successful. Another way to test ONLY the credential is to RDP from the MID Server to the Remote Windows host. RDP validates the credential WITHOUT using the WMI ports. RDP only uses port 3389 to login to the Remote Windows host.
If you can RDP successfully to the Remote Windows host from the MID Server, then you probably have a blocked port issue. Then I would check if port 135 from the MID Server to the Remote Windows host is open AND high ports 49152 - 65535.
