I?m also running Site Server 3 (and Site Server Commerce 3) on Windows 2000 which I upgraded from NT 4. I had the same problem you are describing after I installed the security rollup patch from January.
If you have applied the January Security rollup patch but NOT the most recent hot fix then your P&M (LDAP) Membership database will behave exactly the way you are describing. The culprit is Q298012 (which is also included in the rollup). You can either get a specific patch for this (Call MS and reference patch Q317815 ? which provides an updated msapssps.dll), get the latest security roll patch dated in June, or uninstall patch Q298012. I recommend getting the latest patch. This is what I am running and everything is now fine on myservers.
Hope this helps!
Wolf Tombe