OSStatus 5 when trying to use Lion Server as time machine

Question

I've set two volumes on hard disk 2 of the mac mini server with snow leopard server (now running lion server).
When I point my new MacBook Air at the time machine the Lion Server is serving which is simply displayed as Time Machine on server1.voigtstr.com, I authenticate (both server and laptop share the same username and password) and then I get
Time Machine can't access the backup disk "Time Machine"
The operation couldn't be completed. (OSStatus error 5.)
What needs to change at either the server or client side?
thoughts so far were that the time machine volume was case sensitive and the laptop was not, so I reformatted the server volume to be not case sensitive.
Any other thoughts?
When I choose "Do Not Backup" the Time Machine system prefs applet is left in a state of "Preparing Disk".  Is that likely to finish in multiple hours? Or is it just in a hung state?
Cheers
Voigtstr!

Answer 1

I had the same problem.
Time machine on my server, updated from Lion to Mountain Lion.
Fixed it by:
(To be completely safe, always start by backing up to a extra external hard drive, if you can.)
On the Machine that is your Server
I went to (Server>Services>Time Machine). My Time Mahine backup folder was there.
Open a Finder window and follow the path to your backup folder
When I checked on the backup drive folder it didn't exist.
In Finder use "New folder" and recreate the directory folder as shown in (Server>Services>Time Machine) eg. Volumes/TM folder/Shared Items/Backups.
Go to the Server>Services>File Sharing. Check that the Master folder (ie. TM folder)you are using for your time machine is shared. Double click on it and check that the account you use to connect to the server has "Read & Write" access.
Open the Server Panel, under Services >go to "Time Machine" and turn off the Time Machine. (Server>Services>Time Machine)
Select the current folder and remove "-" the folder currently showing.
Then add "+" the newly recreated folder
Go back to Server>Services>Time Machine
Then turn on the Time Machine
Then try to connect your macbook to the Time Machine server again
If you get to step 3 and find the folder is there then just skip step 4 and do the rest to reset it.
It may not connect your machine to it's previous TM folder so before continuing on to step 5, mark that by ctrl+click>Label> any colour. You can then go back later when you have a couple of up to date backups in the new folder and delete the old on for more space.