Environment

Windows Server 2008 R2

Roles installed

• File and Storage Services
• Active Directory Domain Controller
• DNS

Problem

Today i am trying to demote a Domain Controller and ran into the following error.

The operation failed because:
Failed to configure the service NETLOGON as requested
“The wait operation timed out”

Resolution

The problem was the servers DNS was pointing to itself using 127.0.0.1
Moving this to another DNS server in the Domain allowed me to complete the demotion.