Sometimes, you may find that you get “HTTP 400 Bad Request” error, or “HTTP 401.1 - Unauthorized: Logon Failed” error when navigate to local SharePoint sites and asked for credentials tree times.
This mostly happens for Web sites that use Integrated Authentication and have a name that is mapped to the local loopback address. More details in KB896861.
Such situation is “behavior-by-design” and caused by Windows security updates, when authentication fails if the FQDN (fully qualified SND name) or the custom host header does not match the local computer name.
Solution: run REGEDIT and create DWORD “DisableLoopbackCheck” equal “1” in HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa.
PS: I actually had all my sites inaccessible after bunch of security updates on Windows 2008 before and after installing SharePoint SP2, and this solution returned sites back