Digging on the web, I found only more and more articles either repeating the steps from the Microsoft article or stating similar problems, with no solutions, to mine.

Firstly, let me declare the obvious: port 123 (SNTP) was forwarded to my domain controllers IP, both TCP and UDP, on my ADSL router. (NAT)

I tried my silver-bullet: unregister w32time and start again. I created the following batch script:

net stop w32time

w32tm /unregister
w32tm /register

w32tm /config /manualpeerlist:192.43.244.18 /syncfromflags:MANUAL /reliable:YES

net start w32time

w32tm /config /update

w32tm /resync /rediscover

The first line stops the NT service. You then unregister it and re-register it, recreating all the registry keys with default values, giving you a standard starting point. After that, I configure it, specifying an NTP server’s ip address as a peer (this IP is time.nist.gov) and that it should synch from the manual peer list. I also mark this server as a reliable time server. I then start the service again, tell it to update its configuration, just in case, and then resync.

Extra Steps :-

You have to be very sure you followed the instructions for using an external time source correctly. I’ve used these instructions on many a 2K3 server without issue, so to recap:

1. Change Windows to use the NTP protocol for time synchronization:
Key: HKLM\SYSTEM\CurrentControlSet\Services\W32Time\Parameters\Type
Value: Type
Data: NTP

2. Configure the AnnounceFlags value:
Key: HKLM\SYSTEM\CurrentControlSet\Services\W32Time\Config\AnnounceFlags
Value: AnnounceFlags
Data: 5

3. Enable the NTP server value:
Key: HKLM\SYSTEM\CurrentControlSet\Services\W32Time\TimeProviders\NtpServer
Value: Enabled
Data: 1

4. Specify the NTP server to use:
Key: HKLM\SYSTEM\CurrentControlSet\Services\W32Time\Parameters\NtpServer
Value: NtpServer
Data: time.nist.gov,0×1

5. Select the NTP polling interval:
Key: HKLM\SYSTEM\CurrentControlSet\Services\W32Time\TimeProviders\NtpClient\SpecialPollInterval
Value: SpecialPollInterval
Data: 900

6. Configure the time correction settings:
Key: HKLM\SYSTEM\CurrentControlSet\Services\W32Time\Config\MaxPosPhaseCorrection
Value: MaxPosPhaseCorrection
Radix: Decimal
Data: 3600

Key: HKLM\SYSTEM\CurrentControlSet\Services\W32Time\Config\MaxNegPhaseCorrection
Value: MaxNegPhaseCorrection
Radix: Decimal
Data: 3600

After this, stopping and restarting the NTP service should get you working. If it does not, check the value configured in step 4 – this being misconfigured is the only time I’ve seen errors in the Windows Time service like the ones you’ve posted, so it’s possible this is incorrect in your registry. I would also suggest using a time server OTHER than time.nist.gov, as it is a VERY busy time server and you are likely to miss one or two time syncs to it before you get a good one. I would suggest using another time server, preferrably a stratum-2 NTP server closer to you. You can find these listed here:
http://www.eecis.udel.edu/~mills/ntp/clock2a.html