I would try to figure out on what stage it is 'hanging'
- Can you see the connection come up on the server when running
sp_who2 in SSMS ?
- If yes, use
DBCC INPUTBUFFER () to see what's going on (or profiler)
- If not, are you sure you've got the connection-string correct ?
- If not, does the server allow for remote connections (silly I know, but been there)
- What error message do you get when you lower the connection-timeout to say 10 seconds ?