Please do the following for me:
1. On the PXE, rep, run "PxeConfig.exe" which is in the C:\Program Files (x86)\LANDesk\PXE\System folder on 64-bit PXE reps or C:\Program Files\LANDesk\PXE\System folder on 32-bit PXE reps.
2. Right click on "Boot server" in the tree on the left.
3. Under the "MFTP" options uncheck "Enable Multicast transmit"
4. Save the change.
5. Restart the 2 LANDesk PXE services on the PXE rep.
6. See if it will continue further on PXE boot.