Has anyone seen SPD trying to pass AD credentials from the local machine
instead of the AD credentials the user enters into SPD when connecting to a
web site?

We're operating in a split environement where workstations running SPD are
operating in domain "A" but web servers we're working on are in domain "B".

We can enter the domainB\username & password into SPD when opening a web
site but somwhere underneath SPD seems to be passing the machine's local
domain A credentials to the web server (which are not correct) and the
domainB account gets locked out...