I just ran into what appears to be the same issue. My log files were showing that I was being rejected by the VBR server (not the repository). I then went through and tried to reconfigure the job when I noticed I had specified my AD credentials. My password expired and I had to change my password on the Backup Server window. After that the job ran fine.
Of note is that I do not run as local admin. So I have a question / feature request. If my domain account were to be part of the local admin group, would I still need to change my password on the Backup Server window, or would VEB pull my credentials from Windows?
The feature request part - if there is a logon failure, make it a little more apparent as to why. Maybe a link to a pop up to let you type in new credentials?