I heard back from Microsoft technical support on this issue.

Their email is below. We have confirmed the behavior on our on systems.
Basically if you running an application from a folder on network share on an OS after Windows XP then the users will need Read rights to all the parent folders of that folder. If they do not have those Read rights then due to some new security implementation they will not be able to connect to a SQL Server using TCP/IP. Windows XP and earlier does not have this problem. Vista and Windows 7 do.

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Hi Karl,

I had reviewed the details in the ticket and also your email to me. The original issue was reported as –
Error:
Form a FoxPro application using ODBC:
Connection failed
SQL State '01000'
SQL Server error 53
[Microsoft][ODBC SQL Server Driver][DBNETLIB]Connection Open
Connection failed
SQL State '08001
SQL Error 17
[Microsoft][ODBC SQL Server Driver][DBNETLIB]SQL Server does not exist or access denied.
From a .NET applicaton:
A connection to the database could not be established.
Type: System.Data.SqlClient.SqlException
Message: A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: TCP Provider, error: 0 - An invalid argument was supplied.)


Based on this, I can suggest a small test for your end client to apply and share the observation with us. The basis for suggesting this action plan is-
(provider: TCP Provider, error: 0 - An invalid argument was supplied.)

If an application is located at \\machinename\directory1\directory2\ and on launch from another machine fails with error Invalid Argument when using TCP/IP or winsock!socket(). The reason is, if any of the intermediate folder does not even have Read permission for the user that is trying to launch the exe that calls socket(), with fail with Invalid argument error. So, you can suggest to your end client to give explicit Read permission to all the intermediate folders and then try to launch the executable and share the observation.
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