There were some initial bugs logged for using an Existing SQL Db from 10.0 but since then have been resolved with SP1. Can you verify sp1 is installed for Server by running the patch utility finder on your GIS Server? See link below: http://support.esri.com/en/downloads/patches-servicepacks/view/productid/189/metaid/1913#idsp Also, since you suspect it might be a port issue, please sure the proper ports are open per the following documentation: http://resources.arcgis.com/en/help/main/10.1/index.html#//015400000537000000 You can run the following command prompt to check: netstat -an |find /i "listening" > c:\openports.txt
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