Broken by updates.

Symptoms:

You can not access IIS web sites locally, search indexing does not work, any service what should authenticate to IIS with NTLM does not work.

Solution: 

From http://support.microsoft.com/kb/896861

I fixed it by this method on two MOSS 2007 servers -

"Method 2: Disable the loopback check

Follow these steps:

1. Click Start, click Run, type regedit, and then click OK.
2. In Registry Editor, locate and then click the following registry key:
   HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa
3. Right-click Lsa, point to New, and then click DWORD Value.
4. Type DisableLoopbackCheck, and then press ENTER.
5. Right-click DisableLoopbackCheck, and then click Modify.
6. In the Value data box, type 1, and then click OK.
7. Quit Registry Editor, and then restart your computer. "