Crystal Report ADO Connection Error

I have a Crystal Reports created against an MS SQL Server DB using an ADO Connection (crdb_ado.dll). I am using a hardcoded user ID and password for logging into SQL Server, everything works fine when I log from Crystal Reports client, I am able to connect to SQL Server and refresh the report.
When I publish to BOE and access from Infoview or CMC I get an error "[Failed to open the connection.
xxxx report Details:  [Database Vendor Code: 17 ]]". I use the same account for SQL server under database config for Crystal report within CMC.
Please see release info below:
BOE XI 3.1 FP 3.1 (Windows 2008 server)
Crystal Reports 2008 FP 3.1
I have checked the  ADO dll version, size etc. on both client and BOE XI server and it looks the same.
Are there any additional configuration required for this connection to work from BOE XI?
I enabled log on BOE side and could not get anymore information other than the above message. We also tried with the SQL Server SA account to make sure this is not an access issue.
Thanks.

Hi Don,
Please see answers below:
>
> What happens if you set the logon over ride properties for each instance?
>
I select the option "Use same database logon as when report is run" and get the error mentioned in the first message.
> Also need to know what version of SQL Server you are using and if you are using the Native Client or the OLE DB for SQL Server driver?
>
We are using SQL Server 2008. I have tried with the OLEDB for SQL driver and with the Native client. In both the cases I am getting the same error. I also tried to change the OLEDB.sbo file as mentioned in note 1204488.
Thanks.

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