Remove PC from the domain, re-add it. You're not actually logging on using a "local" profile, but a cached profile of your domain user account. A local profile would be if you selected to logon using the "this computer" name.
I would agree; however, if this is only happening to you and not other people on the comp I would backup your local docs and try a delete/recreate of your profile. There could be some bad data cached in your local profile that isn't allowing it to sync properly to the domain.
Windows is notorious for this.