Okay, if you've got other SQL Server logins connecting successfully, have you verified the sa password? For instance, can you terminal into the server and login? You'll avoid IPSec or anything else that might be a barrier because you'll be using shared memory.
If you don't have other SQL Server logins connecting successfully, verify mixed, stop and restart the SQL Server service.
K. Brian Kelley
http://www.truthsolutions.com/
Author: Start to Finish Guide to SQL Server Performance Monitoring
http://www.netimpress.com/shop/product.asp?ProductID=NI-SQL1
K. Brian Kelley
@kbriankelley