>Ok, how many connections are currently open?
>
>Check for any messages from SQL Server in the Application Event Log and in the ERRORLOG file (by default located in the C:\Program Files\Microsoft SQL Server\MSSQL.1\MSSQL\LOG directory).
>
I found that Report Service is running. I don't think I have it running localy. I'm trying to stop it right now and see if it makes a difference.

Nope, didn't help. Ok, I'll try to debug it tomorrow.