Problem solved. We found that we didn't have the proper entry in the web.config file for the site that uses forms authN. We added
to that web.config on the two servers in ou farm and now RadEditor loads successfully.
|<add verb="GET,HEAD" path="ScriptResource.axd" type="System.Web.Handlers.ScriptResourceHandler, System.Web.Extensions, Version=1.0.61025.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35" validate="false" />