I ran into this problem recently with a Windows Server 2003 R2 SP2 machine hosted in a Hyper-V environment where repeated 1054 errors are logged on the client machine.  At first in my research I found that this is an old problem originally reported with AMD Opteron CPUs with multiple cores. (http://blogs.technet.com/perfguru/archive/2008/02/18/explanation-for-the-usepmtimer-switch-in-the-boot-ini.aspx).  It all stems from a problem where Windows was not properly counting CPU cycles on dual or multi-core systems.  Many times this problem is found with Negative Ping times where the initial time for a ping request may come from CPU Core A and after the request is made the time stamp may come from CPU Core B.  The problem though is that the time from CPU Core B was less than the original time returned from CPU Core A thus the negative ping time and in the end the request would fail as Windows could not handle the negative ping time return.

Theoretically this problem was fixed with a patch from AMD and SP2 of Windows Server 2003 however I am not sure why this problem has resurfaced.  The apparent problem arises in the Hyper-V environment because Hyper-V provides a pool of CPUs to the virtual machines to use.  So it is possible that even though the server uses a single CPU core it still is load balanced among the entire pool of CPUs by the Hyper-V Hypervisor and therefore the CPU clock can still return a bad time stamp.

The problem only appears from what I can see to reproduce itself in Windows Server 2003 and R2.  With that being said it is a very easy fix, there is even a Microsoft KB article for a step by step procedure.  However you can simply do the following:

1. Edit the Boot.ini file
2. Add the Load Operator “/usepmtimer”
3. Verify the edit by running “cmd bootcfg”
4. Restart the machine
5. All is well!

If you want more info from Microsoft see the KB Article: http://support.microsoft.com/kb/895980

Additional References:

http://blogs.msdn.com/tvoellm/archive/2008/06/05/negative-ping-times-in-windows-vm-s-whats-up.aspx

http://forums.citrix.com/thread.jspa?forumID=75&threadID=93813&tstart=60

-Brent