Yep, I am specifying dbo.DEFAULT as the version parameter. Once the database connection is created, I have to manually edit the connection properties and specify dbo.DEFAULT as the version again before it will connect.
[HTML]database = r"Database Connections\CENSUS.sde"
if arcpy.Exists(database):
pass
else:
arcpy.CreateArcSDEConnectionFile_management ("Database Connections", "CENSUS.sde", "CENSUS", "sde:sqlserver:00.00.000.000", "CENSUS", "DATABASE_AUTH", "USER", "PASS", "SAVE_USERNAME", "sde.DEFAULT", "SAVE_VERSION")[/HTML]