Hello...there are several suggestions given in this thread: 
https://www-secure.symantec.com/connect/forums/pausing-workflow

Here is some information that may help as well, in addition to the aforementioned thread:

There are two possible solutions to this issue:

1) Set up HTTP authentication in the Workflow Server Extensions configuration. This will tell the Server Extensions to authenticate using different credentials. This option is found here:

Start > All Programs > Altiris > Workflow Designer > Tools > Server Extensions Configurator

Find the section called "Webservice Auto Invoke", click HTTP Authentication, and put in the username and password that will have the required rights to the .asmx files.

2) Select the AutoInvokeDelegateService.asmx and WorkflowManagementService.asmx files in IIS Manager and set their authentication to Enable Anonymouse access. Also make sure that Integrated Windows Authentication is not selected.

that seems to have done the trick.
not sure which one because I did them both.
one last thing. How do I abort a workflow process?

you need to turn on the option... "Allow Workflow Abortions" on the Publishing tab.  Then you'll have an "Abort Workflow" method available via the WorkflowManagement.asmx service when you deploy.

I just realized I have about 60 processes running from testing.
I can see them in the reports in process manager.
is there any easy way to kill those 60 processes?