L2TP stuck on "Verifying Username and Password"

Cannot connect to L2TP server on Sonicwall, getting error 789 or 661 or 809 on L2TP on Windows clients.

The L2TP server is configured with CHAP as preferred authentication method.

Make sure the password you're using is not simple.

CHAP supports only letters and numbers but the password should be 8 characters minimum and containing both letters and numbers.

Unfortunately CHAP doesn't prompt the user to change the password so you don't know if the issue is related to the password but changing the preferred authentication method on the SonicWall to MSCHAPv2 and trying to authenticate to the L2TP VPN, you get the message to change your password.

If you're using a password like "test", the L2TP connection stuck on verifying username and password but changing it to "test2016" the connection is fine.