Looks like you somehow set your system up to use NIS for its authentication (ypbind is part of the NIS suite of utilities). Unfortunately, since I've never set this up I'm not sure how you would go about undoing it, since if you don't know what NIS is, chances are you don't want it.
I did do a little googling which may help -- first off try seeing if you have a ypbind daemon running (do ps aux | grep ypbind on the command line, if you see something besides your grep command listed, you do). If you do, kill it (killall ypbind should do nicely) then remove the /etc/defaultdomains file (actually might be best to move it off somewhere else in case something gets messed up and you need it back). Then try again and see if that helps. Also, if there's a line in your /etc/passwd file begininng with a +: you should probably remove it (this line tells NIS to import user data from an NIS server).
I'm not much of an expert on NIS, but I hope this helps some.