Interestingly enough I posted this about a week ago:
It feels like, to me anyhow, that flash builder 4 is using the locally stored resources when using the "Run index" button regardless of whether or not you are building your projects to a web server that does not reside on your local machine.
This didn't seem like the case in flex builder 3 and your projects where fully functional when you used the run index button regardless of what machine you were accessing them from on the network and regardless of whether or not windows authentication was enabled.
Bump for an answer... is there a setting somewhere to make flash builder 4 behave like flex 3 with regards to the run index issue?
To further illustrate my issue I've recreated my project in flex builder 3 the captivate demo can be seen here:
so we have two projects created on the same machine, identical code, being built to the same web server... one works using the "run index" button (FlexBuilder3) and one does not (FlashBuilder4). Anyone from adobe with some possible insight to this issue?
After a tremendous amount of frustration and days of exhaustive web searching, which yielded nothing, I stumbled across the answer by accident while leaving work so I thought I'd share it with you incase anyone else is experiencing the same frustration using flash builder 4 and windows authentication.
Turn off the flash builder 4 built-in network monitor.
This captivate demo illustrates the issue and resolution. In the captivate demo I didn't show the response details on the http service but its your standard:
401 - Unauthorized: Access is denied due to invalid credentials.