digest authentication on virtual (networked) directories

I'm using digest authentication for access to our intranet and it's
working perfectly when the directories are local to the webserver.

If I add a virtual directory that points to a directory on another
machine (\\server\share\directory etc.), digest authentication no
longer works...


....unless I add NETWORK to the directory's ACL list... but when I do
that any user with a valid AD account can log on to the directory and
the share level ACLs no longer have any effect...


If I don't have NETWORK in the ACL list, I get a prompt for
authentication 3 times, then a "you are not authorized... etc." error
message.


Looking through the Security Event log on the web server give me
three
entries saying the my logon request was successfull, but it seems to
be falling over between webserver and network share.


Anyone have any ideas???


Many thanks in advance