Management Reporter 2012 RU4 GP connection error

I installed the MR2012 RU4 on a 2008r2 server. The version on MR2012 is 2.1.1033.30.

 I'm on GP2010 version 11.00.2197.

This is a fresh install, not an upgrade.

 I have verified the firewall port is open.

The Application and Process services are running. But when I try to add the GP Data Mart or GP Legacy connections it errors out with " Couldn't retrieve the list of available databases: The connection attempt failed. "

I have tried various usernames - SA, the Management Reporter account, my own username. 

One thing different on my configuration is we're using a named instance on the database. So the database server is " DATABASE\greatplains " instead of just " DATABASE ".

Something wierd is it doesn't really seem to be verifying the username and password. For example I could enter ILIKEPUPPIES as the username and password and get the same error as when I put in the correct username and password.

Anyone else having this same problem? 

Thanks,

DavidF.