Hi James,
To troubleshoot the issue, I suggest you restart services that are associated with password synchronization to see if there is any improvement. To do this, follow these steps:
1. Click Start, click the Start Search box, type services.msc, and then press Enter.
2. Right-click Forefront Identity Manager Synchronization Service, and then click Restart.
3. Right-click Windows Azure Active Directory Sync Service, and then click Restart.
If the issue persists after performing the above steps, I would like to confirm the following things:
1. Is there any other Windows server such as Windows 2003 in your organization or all servers are Windows 2008 R2?
2. Do cloud users have temporary passwords?
Thanks,
Johnny Zhang