This JESPA error is typically associated with the computer account or the password that is used for NTLM authentication. What follows is a snippet about this error from the JESPA Operators manual (https://www.ioplex.com/support.html):
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Issue 10: The "Login failure: unknown user name or bad password" exception

This error will occur if you set the localhost.netbios.name property. That property is deprecated. See the Validating NTLM Credentials with the NETLOGON Service section for details.Otherwise, this error almost certainly means exactly what it says - the account does not exist or the supplied password is incorrect. However, there are obscure cases where it is possible to supply the correct account and password and still receive this error.

One such case is if you set the domain.netbios.name property. The domain.netbios.name and domain.dns.name properties are read-only and should NOT be set (except when used with the MyNtlmSecurityProvider example). If these properties are set, NTLMv2 will not be negotiated and clients that require it will fail with this error.

Another possible cause is if incorrect credentials are saved in the Network Password Dialog. Clear any saved passwords for the target and try again.
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Here are few pointers to check:

1. Make sure the service account that is used for NTLM authentication is a 'Computer Account' and not a 'User Account'
2. Make sure the 'Computer Account' is unique to this configuration and not shared with anything else
3. Make sure the Computer Account format was correctly entered in the configuration (computer name must be lessthan 15 characters and should have a $ at the end). 
4. The 'localhost.netbios.name' property isn't set in the configuration