In Root Domain it should be DC=MYDOMAIN, DC=EDU. 
Username should be MYDOMAIN\USERNAME

There's nothing special about the account that you use. NETWORK SERVICE/ASPNET which your DNN site runs under are local accounts on your server and won't have permissions to the AD so you need an AD user account that can authenticate against the AD.

It's been awhile since I've seen that error but try the following:

Recycle/Restart the application under Host->Host Settings or stop/restart the website in IIS. If that doesn't work then look in your web.config for the commented out section that starts with <identity impersonate="true" />. Uncomment that line only and change it so that it reads <identity impersonate="true" userName="domain\username" password="password" /> (you can use the read only account you used in the setup above). You'll also have to give that user the same rights on the DNN install that NETWORK SERVICE/ASPNET has.