Well, after reading this thread it looks like you also need to make sure that the "BUILTIN\Administrators" group has a login to SQL Server and make sure it is included in the sysadmin role. I guess this assumes you need to configure your SQL Server for mixed authentication mode.

I double checked both SQL Server network utilities and this is the way mine are set up:

SQL Server Client Network Utility:

--Enabled protocols: TCP/IP, Named Pipes (in that order)

--Alias tab: (none defined)

SQL Server Network Utility:

Enabled protocols: Named Pipes, TCP/IP