Error while trying to connect to a remote SQL Server DB using multiconnect

As part of our business process, we need to connect to a SQL Server DB external to SAP.
We have done the following:
1. We set up an ODBC connection on our SAP sandbox server to the external SQL server DB. 
Name: sdsdev
Connection string: sdsdev\sqlexpress2008
2. We tested the ODBC connection from within ODBC and it works perfectly
3. Using transaction: DBCO we have set up a DB connection known to SAP that we can use in ABAP to retrieve the data.
    It was set up with exactly the same parameters as with the ODBC.
    We used the following connection string so it would know to use the ODBC DBSL profile parameters, with the DSN name  
being the same as defined in the ODBC:  See below ...
    DB connection: AR_INTERFACE
    DBMS: MSS
    User Name: ARTransfer
    Password: ******
    Conn info: MSSQL_DSN=sdsdev
4. We also made sure we installed the DBSL dynamic library (DLL) on the R/3 system server.
5. We ran a small test program to test connectivity ... as below ...
     exec sql .
         connect to 'AR_INTERFACE'
     end exec.
     right after the above command we check the system log for status.  It failed with the following message:
B Wed Feb 09 14:40:40 2011
B Connect to AR_INTERFACE as ARTransfer with MSSQL_DSN=sdsdev
MSSQL_DBNAME=ARTransfer
C Thread ID:3900
C dbmssslib.dll patch info
C patchlevel 0
C patchno 118
C patchcomment Problems with the use of literals in non-unicode
systems (1524929)
C np:(local) connection used on SAPS101B
C OpenOledbConnection : CoCreateInstance failed. rc: 8007007e.
C failed to establish conn to np:(local).
C Retrying without protocol specifier: (local)
C OpenOledbConnection : CoCreateInstance failed. rc: 8007007e.
C failed to establish conn. 0
B ***LOG BY2=> sql error -1 performing CON [dbds#2 @
1056] [dbds 1056 ]
B ***LOG BY0=> <message text not available> [dbds#2 @ 1056] [dbds
1056 ]
The connection failed !
We used all of the information found in OSS Notes we could find.
Has anyone had this problem before ?  Is there something obvious we are missing in all this ?
Thank you for your assistance.

Is this Excel or Access?  If Excel, try this.
Sub ADOExcelSQLServer()
' Carl SQL Server Connection
' FOR THIS CODE TO WORK
' In VBE you need to go Tools References and check Microsoft Active X Data Objects 2.x library
Dim Cn As ADODB.Connection
Dim Server_Name As String
Dim Database_Name As String
Dim User_ID As String
Dim Password As String
Dim SQLStr As String
Dim rs As ADODB.Recordset
Set rs = New ADODB.Recordset
Server_Name = "EXCEL-PC\EXCELDEVELOPER" ' Enter your server name here
Database_Name = "AdventureWorksLT2012" ' Enter your database name here
User_ID = "" ' enter your user ID here
Password = "" ' Enter your password here
SQLStr = "SELECT * FROM [SalesLT].[Customer]" ' Enter your SQL here
Set Cn = New ADODB.Connection
Cn.Open "Driver={SQL Server};Server=" & Server_Name & ";Database=" & Database_Name & _
";Uid=" & User_ID & ";Pwd=" & Password & ";"
rs.Open SQLStr, Cn, adOpenStatic
' Dump to spreadsheet
With Worksheets("sheet1").Range("a1:z500") ' Enter your sheet name and range here
.ClearContents
.CopyFromRecordset rs
End With
' Tidy up
rs.Close
Set rs = Nothing
Cn.Close
Set Cn = Nothing
End Sub
Knowledge is the only thing that I can give you, and still retain, and we are both better off for it.

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