If the account is another domain this won't work, because IPM won't be able to impersonate that user to perform the action. What you might try is to create a local account on the target machine with appropriate privilege to restart services and then create another local account on the IPM host machine with the same username and password. Then, set the restart service action to use this credential. This same trick applies to monitoring via WMI when the target machine is not in the same domain as IPM.
I'm having a similar problem.
However, I'm running IPMon 10.0 build 1371 and I'm trying to monitor events on a system not added to a domain.
"Logon failure: unknown user name or bad password; oserror: 0x52e"
"Unable to open Event Log "System" on "xxx.xxx.xxx.xxx". Reason: The ipMonitor service context does not have the necessary privileges to impersonate"
I've set up a service account on the non-domain machine and made it part of the local admins group. I have mirrored this on the IPMonitor server.
I've set up the credentials in IPMonitor as follows:
Username: LOCALHOST\service account
Password: *password used for service account on non-domain machine*
Even with accounts on both servers, still getting the above errors.