SqlCE Synchronization Issue: Native Error 29006, The process could not deliver the snapshot to the Subscriber

[Rod]

I orginally posted this to microsoft.publi c.sqlserver.ce but had not
received any responses.

I have a CF.NET application (C#) with a SqlCE database. We had
originally planned to use SQL Authentication to replicate with the
publication and indeed had SQL Authentication working flawlessly. Then
our client asked us to use Windows Authentication instead.

For incremental changes, Windows authentication works fine. When
trying to do the initial synchronization where the application receives
the snapshot database from the publishing database, there is trouble.
I have tested this in the PPC 2002 and 2003 emulators and on an
actually PPC device as well. I get the following error:

A call to SQL Server Reconciler failed. [,,,,,],
Source=Microsof t SQL Server 2000 Windows CE Edition,
NativeError=290 06,HResult=-2147467259

The process could not deliver the snapshot to the Subscriber.,
Source=Merge Replication Provider,
NativeError=0,H Result=-2147201001

Here is difference in my code between Windows and SQL Authentication:
#if SQLAUTHENTICATI ON
repl.PublisherL ogin = "MyLogin"; // publisher Login;
repl.PublisherP assword = "MyPassword "; // publisher Password;
repl.PublisherS ecurityMode =
System.Data.Sql ServerCe.Securi tyType.DBAuthen tication;
#else
repl.PublisherS ecurityMode =
System.Data.Sql ServerCe.Securi tyType.NTAuthen tication;
#endif

As far as I know, I have properly configured the snapshot IIS folder
with the correct permissions for IIS_MachineName (for anonymous-Sql
Authentication) and also with the domain users for Windows
Authentication. The domain users are also in the Publication Access
List.

The bottom line is that in for Windows Authentication I am not able to
receive the snapshot from the publishing database on the first
synchronization . However, I am able to do incremental synchronization
through Windows Authentication. And I have no problems with SQL
Authenication (via the anonymous user).

I am stumped by the "process could not deliver the snapshot to the
Subscriber" error. Have any of you encountered this situation before,
and if so, how did you resolve it?

Note: SQL Server and the IIS folder for synchronization are all on the
same machine.

Thanks,
Rod Early