Hi
You are correct - it is due to an issue with one or more SQL settings; or it could be that the firewall on the server has been enabled.
Check out the forum topics such as If using VPN connection for remote users and SQL and getting error: 26 - Error Locating Server/Instance Specified and (provider: SQL Network Interfaces, error: 26 - Error Locating Server/Instance Specified)
as both provide links to sites that identfiy specifics that should be checked
Do post back which was the issue.
- Joyce