I have a server that gets it time reset to 7 hours in the past. When this happens forms authentication no longer works.
When I resync the time with the server time it works again.
What could be causing this? It is actually and issue for me more so then changing the time, because I don't think it will be possible to keep all the clients and the servers in sync.
Most likely the server doesn't have the correct time zone settings. I've had the same issue because of time zones. This can be particularly apparent when you have users in multiple time zones (their cookies won't always stay alive which is usually a result of the time zone's being wrong, and probably the reason your authentication is failing). An exact time jump like 7 hours off (assuming minutes, seconds are accurate) is definitely the system updating to what it thinks is the "correct" time.
You can't have a production server with jumping time. Google "Windows NTP time synchronization" to find how to easily configure your servers to always be within microseconds of correct time.