There was an odd error that we have been seeing in one of our SharePoint 2007 server farms. When trying to access the Search settings page in Central Administration's Shared Services Provider, the SSP gives this error:
"Authentication failed because the remote party has closed the transport stream."
It ends up that it's an issue with the SSL certificate that is installed on the "Office Server Web Services" IIS instance. Somehow it gets corrupted when .NET 3.5 Service Pack 1 is installed.
Microsoft knows about the issue and has a fix right here: