Running SBS 2011 with a single DC and I am having issues modifying certain GPO settings.

I was going to simply increase the maximum password age to 60 days, and after making the change to the GPO and trying to save, I receive an error:

GPO error screen shot

From the screen shot above, one can see that the file does indeed exist.

To test further I created a new test GPO and tried to enable the same setting and I got the same error.

I can set GPO **Preference** settings OK, such as "Create new folder c:junk", but not the password policy settings (which are domain related), and as the error window shows, something to do with "Security Templates"

As part of log checks I noticed that the File Replication Service was logging a journal wrap error so I fixed this but still the GPO setting, "max password age" can't be set.

I've spent half a day on this and not getting anywhere.  Has anyone got any tips on how best to solve this issue?  Much appreciated.