Is it possible to query ad Server to check for user presence?

Hmm... I've used that before and not even collected a password- just used the logon box object and removed password so I collected the username only. Maybe try blanking the password variable? Move it to a temporary variable, run the AD query, then move it back? I guess a quick test would be to attempt the AD query with just the username, don't put a password in at all.

One other thing, you need to have the admin credentials in the AAA server configuration. Without that, it will definitely fail without using the user's logon credentials. I'll bet that's why its not working for you- AD will not allow a query unless there are valid credentials- you can use admin credentials by populating the field in the AAA server config.