When you get to the autchenication screen there is a button for client config. Did you check in there to make sure that it is deffiently using the TCP/IP network library and also make sure it does not dynamcially determine the port, uncheck that option and put the correct port in. To me it looks like the server has answered as it is there but does not answer the authorization fast enough before the timeout occurrs. I don't believe this is MDAC related or server side configuration but I am still trying to directly reporduce. You may if your company owns one wanrt to put a packet sniffer of the connection from the user or the local router to the SQL server to see if you are suffering a packet problem. Also run Performance monitor at the client and the server to see if you have a high number of packets being lost this could explain why the client sees the server but is having troubles talking to it.

"Don't roll your eyes at me. I will tape them in place." (Teacher on Boston Public)