does anyone have a fix for the Exchange 2007 kerberos issue when connecting Kayako to Exchange via pop3 or imap?
The reason for the error you are getting is a bug in MS Exchange 2007. The exact reason is, Exchange server falsely advertises that it support Kerberos authentication even when it is configured not to use Kerberos. This causes the fetch request to fail from PHP as PHP-imap always tries to use Kerberos first.
The workaround to this issue is either to use a different mail server or compile PHP without Kerberos support(in that case it will simply ignore Exchange's erroneous behavior regarding Kerberos).
If possible you may setup a secondary mail server (Non exchange 2007) and forward the required emails there and configure help desk to fetch the emails from the secondary email server(non-exchange 2007) instead of your Exchange server 2007.