Check a workstations IP information to see that is only points to your internal DNS server. Actually you do not have to use your IPS’ DNS settings. If you have not looked at OpenDNS (www.opendns.com) I recommend that you do. You can do many administrative things with their free DNS, like prevent IM sessiongs, logo the did not find page type things.
You can also check group policy to ensure that some setting is not holding up the process. BUT, I would concentrate on DNS to ensure that your workstations can find the resource records needed for logon (domain controller).
Best of luck