Lavanyasri,

I am very much confused. In such a case I can’t debug the issue. Also, I am not sure if you have missed on any misc. setting that might be necessary for your case.

This is my best bet.

Event ID 4166 — Microsoft Distributed Transaction Coordinator Service Log Availability

http://technet.microsoft.com/en-us/library/dd300264(WS.10).aspx

If it doesn’t work, I suggest you to verify your MSDTC configuration with following very carefully...

•Enable Network Access Securely for MS DTC http://technet.microsoft.com/en-us/library/cc753620(WS.10).aspx

•Crosscheck Enable Network DTC Access http://technet.microsoft.com/en-us/library/cc753510(WS.10).aspx

•Restart the Server

And if you face same issue after restart please report it with error number.