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Russ - if you post this, please do not identify my company. Thanks.
(RC:one of many Fortune 1000 reports I've received)

Last week, we spent a fair amount of effort combating the effects of
Code Red and Code Red II. Here is a brief discussion of what we
found.

Background:

We operate a global network with in excess of 300 sites. Officially
supported Windows NT and 2000 servers are located at nearly all
sites. We also have Extranet segments (separated from both the
Public Internet and our internal network by firewalls) and a server
attached to the public network.

In July and on August 1, we saw some difficulties with our public
Internet connectivity due to excessive traffic. We believe this was
related to Code Red. None of our internal servers, extranet servers,
nor our external server was affected directly. We added
configurations to our firewalls to prevent this traffic from causing
issues.

To deal with the threat, we had taken two actions:

1. Packaged and applied the Windows 2000 hotfix to most production
servers. We also removed the mappings for the .ida and .idq
extensions.
2. Investigated our NT 4 servers and identified the very few with the
.ida and .idq mappings. Instructed the people responsible to remove
the mappings ASAP while we tested the NT 4 hotfix.

Detection:

On August 8 we began having problems with our extranet firewalls
again. A few machines were generating a large number of failed TCP
connection attempts, which bogged down the firewalls. An analysis of
the logs indicated that this time the traffic was coming from inside
our private network. We discovered that the machines involved were
running Windows 2000.

We ran a script to examine the IIS logs from all of our supported
servers, and identified 12 IP addresses that were definitely sources
of attack. Of these, only one was an officially supported server,
which had been missed when we applied patches. It was running Code
Red II. The majority of the other machines involved belonged to
contractors, or were installed by other organizations than the ones
in charge of running Windows servers.

Infection:

When we examined the IIS logs, we discovered that the earliest
internal attacks came from addresses associated with our VPN
connection for remote workers. 4 separate attacks were registered
from this address range. It seems likely that this was the infection
vector. We were able to identify the users based on date, time, and
IP address and found they did indeed have IIS 5 installed. We took
steps to make sure their machines could not be re-infected.

Key Lessons:

1. Despite taking all necessary action on our firewalls, servers on
our extranet, and servers exposed to the public Internet, we were
still vulnerable through our VPN.
2. Despite the fact that 99.97% of our production supported servers
were immune, we were still vulnerable - primarily through
non-supported servers and workstations.
3. Only 12 - 14 computers were actually infected; however, this
caused severe problems with our firewalls.

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