Crystal Reports Prodn Deploymt: Incorrect logon parameters

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My Crystal reports are being supplied the logon credentials via a C# code class that recursively loops through all the tables present in the reports and applies the login credentials (Servername, databasename, userid and password). This setup is working fine when i have it working within my domain (office network) where the server is another box (SQL svr 2000).

The login credentials are being read from a web.config file and everthing seems to be normal.

I attempted to deploy these reports to the production box(es) where the reports are on the webserver and the database is on another box. I can see the code gathers the updated server credentials. But i am getting the error incorrect logon parameters while attempting to apply the logoninfo to report's tables. I ran the SQLProfiler to check if the server was being reached at all and found the report logon function cannot even connect at all.

The port for using SQL queries 1433 is open as other queries from the webserver to db work fine. Is there anything i am missing which i should specify along with the report logon params?
Please help.
Thanks in anticipation.

Gary