I had this issue recently. I was trying to enable an enterprise geodatabase on an existing SQL Server 2012 db on Amazon RDS. The enable process seemed to go through successfully. But when I tried to connect using this "master" sde connection, it gave me the same error.
The issue ended up being a user name/schema name mismatch. When I created the database in SQL Server Management Studio, the "master" user name was mapped to the "dbo" schema in the new database. Once these were set to match the error went away.