SYMPTOM

When attempting an RDP connection to a Windows 2008 server (2012 not tested) via the IP address of the server instead of the server name, and when logging in with a local account (not domain account), if requested to change the password, you get an error message with the following wording:

Configuration information could not be read from the domain controller, either because the machine is unavailable or access has been denied

RESOLUTION

When attempting the RDP connection, use the server name instead of the IP address if the name is resolvable on the network. Also, for the username credential, use the syntax servername\username.

It seems that when connecting to a server via IP address, not enough access is given to the local security database to perform the actions to change your password. Once the password is changed however, you can again access the server the same way as originally done.