Lsass.exe - system error or Isass.exe - system error

I got some annoying problem with my Windows XP desktop. It was working fine until yesterday night when I turned off after doing all my work. Today morning when I booted the same it received the following error:

“Isass.exe - system error

Security Accounts Manager initialization failed because of the following error: The handle is invalid. Error Status: 0xc0000008.
Please click OK to shutdown this system and reboot into Safe Mood, check the event log for more detailed information.”

There use to be an OK button which when I click the system restarts again and keep looping the same. I thought I could fix this by booting into Safe Mode but I get the same error message there also. Surprisingly when I try to repair the system using Windows Installation Disk, I still get the same error.

Somebody please let me know what is it related to. Thanks.

Hello CaspaR. I found the solution in Microsoft Knowledge base itself. You should follow the Hotfix provided in the following KB Article:

830574 - You receive a lsass.exe-system error Security Accounts Manager initialization failed error message and event ID 116: http://support.microsoft.com/default...uct=winsvr2003