I've seen problems on some Winders machines where if the value returned by
the %COMPUTERNAME% is in lower-case letters and you didn't specify NODENAME,
then different portions of TSM react differently. What I had was that the
Web client interface would change the encrypted stored password that what
was originally stored with the TSM B/A client and scheduler service.

I don't know if this is your problems, but try specifying the NODENAME in
the DSM.OPT file and on the DSMCUTIL command that installs the service.
Bill Boyer
DSS, Inc.