SBS Backup Fails on VSS 0x800423f4 error
Credit: Rusty Brown, SBSC in WY (Definitely contact him if you're a SMB in WY) dealt with this problem and got help from PSS Texas support member Michelle Dixon.
We'd been fighting this issue on several servers for some time and here's how to fix it.
For SBS 2003 Premium Edition with ISA 2004 installed. On my problem server the ISA Advance Logging MSDE database was corrupt and these are the steps to reset the database. Please be aware that this takes some time and you will think the process has hung, be patient.
NOTE: Do this process in front of the server and not remotely. I found out the wrong way. :)
Start by opening Add / Remove programs and selecting Microsoft ISA Server 2004

Click on ChangeRemove

Next. Two windows will open

Select Modify - Next

Expand Firewall Services

Click on Advance Logging and choose to disable the service

Click Next, you can follow the progress in the second window this takes several minutes.
When this returns you to the Add Remove Program Windows it will take several minutes before you will be able to access the windows. When I could access the Add Remove Programs windows I suggest you close and reopen the window.
Now you just repeat the process above to install the Advance Logging back on to the server.
Opening Add / Remove programs and selecting Microsoft ISA Server 2004

Click on ChangeRemove

Next. Two windows will open

Select Modify - Next

Expand Firewall Services

Click on Advance Logging and choose to disable the service

Click Next, you can follow the progress in the second window this takes a lot longer than the removal so be patient.
I didn’t have to restart the server for the Backup to start working, but I would recommend a restart.