MOSS 2007 error

I am facing one issue in MOSS 2007. There is a webservice, which is running fine in PROD but not in Stage server. This webservice can run through a browser and SOAP also.

 

Also, it is not working from specific Java solution on a different server. We checked the IIS logs and it is showing 401, 401 2, .... error message.

 

Kindly help on this issue. And how this IISCRYPTO.exe tool help us resolving this or any issue....