recovery problem: user denied interactive permission

I'm not a network or IT prof, but an advanced user with some skills,
and a problem On a Windows XP Pro SP-2 machine, tons of ram and
storage.

background: I had an install/uninstall/install blow up a few days
ago, resulting in a boot loop. At some point all my system restore
points disappeared completely, a problem I haven't figured out yet. I
tried a repair install, but it didn't help, so, short story, I copied
the five *. files from \windows\system32\repair to \windows
\system32\config, and windows is now limping along.

current problem: I still have my main user files in Documents and
Settings, under "usermike", so I haven't lost any data (I backed up
the whole mess again). I created a new user account to match my
original (usermike), but now I have a login problem. When I try to
log on under that username, I get this error:

the local policy of this system does not permit you to log on
interactively

I've tried lots of things, including making sure usermike is in the
Administrators group, running

ntrights -m \\ProblemComputer -u Administrator +r
SeInteractiveLogonRight.

and

ntrights -u Users +r SeInteractiveLogonRight

with no change.

Somewhere along the way, yesterday, I had that usermike recreated and
loginable, but not now. I don't know what happened, or how to fix
it.

This is my main workhorse machine, and I REALLY need to get it back on
line.
Any suggestions would be GREATLY appreciated. THANKS.
.