The cause of this issue was related to a bug in the code base that led to a kerberos buffer overflow.
This issue is fixed in DS 7.5 SP1 HF5. The issue resides in the code for SbsServer.exe which is located here C:\Program Files\Altiris\Altiris Agent\Agents\Deployment\SBS on the pxe server.All versions of SbsServer.exe are affected in 7.5 prior to version 18.104.22.16878 which is the version that ships with DS 7.5 SP1 HF5.To fix this issue you can simply call Symantec Technical Support and get version 22.214.171.12478 or upgrade to HF5 when it is released.
Proper Configuration of the HotFix:
To make the hotfix work correctly the following settings must be applied:
1.) Navigate to C:\Program Files\Altiris\Altiris Agent\Agents\Deployment\SBS
2.) Edit SbsConfiguration.xml and ensure that the following line is set to SSL settings. It should look like: