Thanks for the reply.
Unfortunately the link in your post for permissions takes me to a page that has another link which is supposed to describe the permissions needed (the same as SQL Compare) and that link is broken.
I doubled checked the user I am using and that user has SysAdmin rights to the instance and it's a 2005 DB so the additional GRANT VIEW SERVER TO <user> should not be needed.
I also ran SQL Compare against the DB just to make sure it would work and that ran fine too.
I checked the SQL Server Logs and did see logon failures for when I was trying to logon with the original project.
If I open Dependency Tracker and create a new project and login to the server with the same login everything works fine. If I then save that new project, close down and then reopen that new project and attempt to refresh I get the same error.
After trying that I noticed that the SQL Server Logs are reporting that it was attempting to login with both my SQL auth user and my Windows auth user.
After doing a bit of Googling (http://blogs.msdn.com/b/sql_protocols/archive/2006/02/21/536201.aspx
) I've determined that it's either not passing in the SQL Auth password or it's passing in the wrong value as that entry has a State of 8 which indicates invalid password. For the entry for my Windows account (which it should not pass since this DB is connected via SQL Auth) it generates a State of 11 which indicates that it's a valid login but there's a server access failure.