User Accounts Created But Not Able To Logon - No User Profile

I am a lab technician for Microsoft classes at a community college. One of our students somehow messed up his hard drive. The computer is running Windows 7 Enterprise SP1 64-bit. The system has two administrator accounts and one standard user account. I am still able to logon with those accounts and there are SID keys for each of these users in the registry.

Now when we create a new user, the account is created without any problems. The user shows up on the logon page and after running the net user command, it shows up there as well. When I try to logon with the new user, I get a message: The User Profile Service failed the logon. User profile cannot be loaded.

None of the new user accounts show up in the registry. The other anomaly that I see is that the Default User folder is missing in each of the Users subdirectory for the three accounts where I have no problems.

I have read the Microsoft Knowledge Base Article 947215 and none of the methods apply to my problem. I also checked Local Group Policies and the Do not logon users with temporary profiles setting is not configured.