Thanks people.

I've just played with the profiler on my machine (the app works on my DB) and traced the errors transaction and error event. There is no transaction around the delete but more importantly with the create table statement

I can see the error the application is ignoring "user Doesn't have create user rights"

Thanks, hopefully with these metrics traced I can get the error MSSQL is sending back to the app on the problematic machine.

Once again thanks again for taking the time to read my post "one machine don't work mine does and I cannot see a difference"