I'm pretty sure it was a policy imposed from the network domain but the user has administrator access on their box, how can this be?
The administrator account on the machine is disabled (again, I believe this was from the network) and a drive is missing. Booting to safe mode doesn't change anything, it's still disabled.
Google comes up with a lot of people having such problems with XP but this is 7 Pro. Even Microsoft's page on the problem is for XP and just sends you to the top on Win 7's help.