KixJules,
While I'm at a loss as to why KiX fails to enum all group membership, I can at least offer a work-around. Instead of InGroup() to enum membership, check for NTFS or share perms on resources. You could setup a bunch of shares as cookies and what the client sees, the client is a member of. Not elegant, I know, but it could get you by the crunch while working on a cure.
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Give a man a fish and he will be back for more. Slap him with a fish and he will go away forever.