People picker returning Search Filter is invalid in ULS log when searching for users

Hello

I'm encountering a strange issue with people picker and was wondering if anyone can shed some light on this. I've spent about two weeks googling it and also checking the people picker settings using the stsadm command with the people picker switches.

The issues is that some users appear when I search for them and then others do not appear.  When I look at the ULS log I receive this message for the user that do not appear in people picker:

Error in searching user 'jdoe' : System.ArgumentException: The (&(|(&(objectCategory=person)(objectClass=user)(!

(userAccountControl:1.2.840.113556.1.4.803:=2))(|(name=jdoe*)(displayName=jdoe*)(cn=jdoe*)(mail=jdoe*)(sn=jdoe*)(SamAccountName=jdoe*)

(proxyAddresses=SMTP:jdoe)(proxyAddresses=sip:jdoe)))(&(objectCategory=group)(groupType:1.2.840.113556.1.4.803:=2147483648)(|(name=jdoe*)

(displayname=jdoe*)(cn=jdoe*)(SamAccountName=jdoe*))))(|(&(email=*)(!userAccountControl:1.2.840.113556.1.4.803:=2)))(objectcategory=group))) search 

filter is invalid.    
 at System.DirectoryServices.SearchResultCollection.ResultsEnumerator.MoveNext()    
 at Microsoft.SharePoint.WebControls.PeopleEditor.SearchFromGC(SPActiveDirectoryDomain domain, String strFilter, String[] rgstrProp, Int32 nTimeout, Int32 

nSizeLimit, SPUserCollection spUsers, ArrayList& rgResults)    
 at Microsoft.SharePoint.Utilities.SPUserUtility.SearchAgainstAD(String input, SPActiveDirectoryDomain domainController, SPPrincipalType scopes, 

SPUserCollection usersContainer, Int32 maxCount, String customQuery, String customFilter, TimeSpan searchTimeout, Boolean& reachMaxCount)    
 at Microsoft.SharePoint.Utilities.SPActiveDirectoryPrincipalResolver.SearchPrincipals(String input, SPPrincipalType scopes, SPPrincipalSource sources, 

SPUserCollection usersContainer, Int32 maxCount, Boolean& reachMaxCount)    
 at Microsoft.SharePoint.Utilities.SPUtility.SearchPrincipalFromResolvers(List`1 resolvers, String input, SPPrincipalType scopes, SPPrincipalSource sources, 

SPUserCollection usersContainer, Int32 maxCount, Boolean& reachMaxCount, Dictionary`2 usersDict).

I don't have any custom queries set up in people picker so I don't have a clue what the message means.

Any help or guidance would be much appreciated.

Thank you