CRM 4.0 Lost Connection Error from Outlook Plugin in Systray

After installing CRM 4.0 and installing the plug-in for Outlook, we have been getting this pop up error message in the system tray stating:

“Unable to Connect. Lost Connection to Microsoft Dynamics CRM. Microsoft Dynamics CRM will restore the connection when possible. To stop retrying, right-click and select Sign Out”.

So of course you’d assume that the plug-in for Outlook wouldn’t work since it doesn’t have a connection right? Well, not so fast. Everything in Outlook (tracking, synching contacts, create and updating tasks, etc, etc.) all worked fine! So the only downside to this error is that is pops up every 5 minutes. No big deal……

So after an hour of this error message I needed to get rid of it ASAP. Luckly I found a great post in the Google Groups Microsoft.Public.CRM forum. So here is the solution to that annoying problem.

Go in IIS -> Microsoft Dynamics CRM -> _imgs.
Right click and get to the properties -> Directory Security
In the Authenticate and Access Control, click the Edit button.
Make sure the Enable Anonymous Access is checked.

Goodbye lost connection error pop-up!