WSUS 3 SP2

I am having issues with our WSUS Server, Whenever we go to open the MSI, we receive a connection error (corresponding Error 7032 & 7053) in the event viewer (see below).  Otherwise Error 1309 pops up every few minutes as connection is not found.

Database is remote, Upon reinstalling of WSUS Did do a local database and it worked correctly - but have to have the database on the database server.

SQL Server gives error "Audit Login Failed - 18456".  It appears WSUS is trying to use NT Authority/Anonymous Login to login whereas SQL Server blocking it.

Steps Taken:
1) Verified Permissions in IIS
2) Reinstalled .Net 1, 2, 3 & 3.5
3) Verified Registry Permissions
4) Attempted Reinstall (Numerous Times)
5) Added SQL Server Information to Hosts Files to bypass DNS, WINS
6) Verified DNS, WINS permissions - can ping and see servers both ways.
7) Added NT Authority/Anonymous Login to master database view only as a test and did not correct - removed anonymous login.

Any Help/Suggestions greatly appreciated.


Event ID(s):
Event ID 1309:
Event Type:      Warning
Event Source:      ASP.NET 2.0.50727.0
Event Category:      Web Event
Event ID:      1309
Date:            10/8/2009
Time:            11:45:32 AM
User:            N/A
Computer:      WSUS01
Description:
Event code: 3001
Event message: The request has been aborted.
Event time: 10/8/2009 11:45:32 AM
Event time (UTC): 10/8/2009 3:45:32 PM
Event ID: f4a63d02372a44f797d51b4d657091bd
Event sequence: 280
Event occurrence: 91
Event detail code: 0
 
Application information:
    Application domain: /LM/W3SVC/390722648/ROOT/ClientWebService-2-128994870159408508
    Trust level: Full
    Application Virtual Path: /ClientWebService
    Application Path: C:\Program Files\Update Services\WebServices\ClientWebService\
    Machine name: WSUS01
 
Process information:
    Process ID: 3664
    Process name: w3wp.exe
    Account name: NT AUTHORITY\NETWORK SERVICE
 
Exception information:
    Exception type: HttpException
    Exception message: Request timed out.
 
Request information:
    Request URL: http://wsus01.vdc.pnco.com:8530/ClientWebService/client.asmx
    Request path: /ClientWebService/client.asmx
    User host address: 10.214.216.59
    User:  
    Is authenticated: False
    Authentication Type:  
    Thread account name: NT AUTHORITY\NETWORK SERVICE
 
Thread information:
    Thread ID: 28
    Thread account name: NT AUTHORITY\NETWORK SERVICE
    Is impersonating: False
    Stack trace:
 
 
Custom event details:
For more information, see Help and Support Center at http://go.microsoft.com/fwlink/events.asp.

Event ID 7032:
Event Type:      Warning
Event Source:      Windows Server Update Services
Event Category:      None
Event ID:      7032
Date:            10/8/2009
Time:            11:25:46 AM
User:            N/A
Computer:      WSUS01
Description:
The WSUS administration console was unable to connect to the WSUS Server via the remote API.

Verify that the Update Services service, IIS and SQL are running on the server. If the problem persists, try restarting IIS, SQL, and the Update Services Service.

The WSUS administration console has encountered an unexpected error. This may be a transient error; try restarting the administration console. If this error persists,

Try removing the persisted preferences for the console by deleting the wsus file under %appdata%\Microsoft\MMC\.

System.IO.IOException -- The handshake failed due to an unexpected packet format.

Source
System

Stack Trace:
   at System.Net.Security.SslState.StartReadFrame(Byte[] buffer, Int32 readBytes, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartReceiveBlob(Byte[] buffer, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.CheckCompletionBeforeNextReceive(ProtocolToken message, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.StartSendBlob(Byte[] incoming, Int32 count, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.ForceAuthentication(Boolean receiveFirst, Byte[] buffer, AsyncProtocolRequest asyncRequest)
   at System.Net.Security.SslState.ProcessAuthentication(LazyAsyncResult lazyResult)
   at System.Net.TlsStream.CallProcessAuthentication(Object state)
   at System.Threading.ExecutionContext.runTryCode(Object userData)
   at System.Runtime.CompilerServices.RuntimeHelpers.ExecuteCodeWithGuaranteedCleanup(TryCode code, CleanupCode backoutCode, Object userData)
   at System.Threading.ExecutionContext.RunInternal(ExecutionContext executionContext, ContextCallback callback, Object state)
   at System.Threading.ExecutionContext.Run(ExecutionContext executionContext, ContextCallback callback, Object state)
   at System.Net.TlsStream.ProcessAuthentication(LazyAsyncResult result)
   at System.Net.TlsStream.Write(Byte[] buffer, Int32 offset, Int32 size)
   at System.Net.PooledStream.Write(Byte[] buffer, Int32 offset, Int32 size)
   at System.Net.ConnectStream.WriteHeaders(Boolean async)
** this exception was nested inside of the following exception **


System.Net.WebException -- The underlying connection was closed: An unexpected error occurred on a send.

Source
Microsoft.UpdateServices.Administration

Stack Trace:
   at Microsoft.UpdateServices.Administration.AdminProxy.CreateUpdateServer(Object[] args)
   at Microsoft.UpdateServices.Administration.AdminProxy.GetUpdateServer(String serverName, Boolean useSecureConnection, Int32 portNumber)
   at Microsoft.UpdateServices.UI.AdminApiAccess.AdminApiTools.GetUpdateServer(String serverName, Boolean useSecureConnection, Int32 portNumber)
   at Microsoft.UpdateServices.UI.SnapIn.Scope.ServerSummaryScopeNode.GetUpdateServer(PersistedServerSettings settings)
   at Microsoft.UpdateServices.UI.SnapIn.Scope.ServerSummaryScopeNode.ConnectToServer()
   at Microsoft.UpdateServices.UI.SnapIn.Scope.ServerSummaryScopeNode.ConnectToServerAndPopulateNode(Boolean connectingServerToConsole)
   at Microsoft.UpdateServices.UI.SnapIn.Scope.ServerSummaryScopeNode.OnExpandFromLoad(SyncStatus status)

For more information, see Help and Support Center at http://go.microsoft.com/fwlink/events.asp.

Event ID 7053:
Event Type:      Error
Event Source:      Windows Server Update Services
Event Category:      None
Event ID:      7053
Date:            10/8/2009
Time:            10:54:20 AM
User:            N/A
Computer:      WSUS01
Description:
The WSUS administration console has encountered an unexpected error. This may be a transient error; try restarting the administration console. If this error persists,

Try removing the persisted preferences for the console by deleting the wsus file under %appdata%\Microsoft\MMC\.

System.NullReferenceException -- Object reference not set to an instance of an object.

Source
Microsoft.UpdateServices.UI.SnapIn

Stack Trace:
   at Microsoft.UpdateServices.UI.SnapIn.Scope.ServerSummaryScopeNode.ResetScopeNode()

For more information, see Help and Support Center at http://go.microsoft.com/fwlink/events.asp.