Thanks for the tip. I can verify that demoting the OD member to a standalone directory, restarting, and then promoting to a replica resolves this issue.
Facts about my setup:
My OD Master was created in Leopard (with accounts migrated from Tiger OD), and migrated from Leopard to SL
My newest SL server was setup this week and added as a member of the OD.
I attempted to upgrade the new SL server to be an OD replica. This failed with the Augmented accounts error.
I have never created augmented accounts in my OD.
Following the above listed procedure, resolved the issue.
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