When demoting a 2003 domain controller using dcpromo, you may run into the following error:

Error

The operation failed because:

Failed to configure the service NETLOGON as requested

"The wait operation timed out"

The error message is quite misleading as the real cause has got nothing to do with NETLOGON, but is in fact a DNS issue. You will most likely have the server's primary DNS pointing to itself using loopback address (127.0.0.1) or its own IP address.

You can correct the issue by having the DNS point to remaining domain controllers, and remove any DNS pointing to itself (i.e. loopback address or any other IP owned by the server being demoted).