I have 2 SQL 2005 Servers running on Windows 2003 under a Windows 2003 Active Directory Domain.
I introduce Active Directory 2012 or Active Directory 2008 domain controller here locally. It is not precise but I get an error
SSPI handshake failed with error code 0x80090304
This shows a blank user name, and doesn't connect. Some users work, some don't.
I have looked at SETSPN but I don't know what is required for this server to work.
I have looked at the SQL Servers and everything seems to be set up right. I need to make sure TCP/IP Protocol connects. It seems that the Named Pipes works.
Could this be a DNS issue or time server not matching. The SQL server is running in Mixed mode. the service is running under an Active Directory User which the server was originally installed with. Works until we try to add the domain server.
We have 7 domain controllers and there are 3 left that are running Windows 2003. So long as we don't put a 2008 or 2012 here in the corporate office, it works but as soon as we put one in the corporate office the errors begin.
Not the exact error you are getting but many people can get started with this KB article
How to troubleshoot the "Cannot generate SSPI context" error message http://support.microsoft.com/kb/811889?wa=wsignin1.0 The article has links to more info. Perhaps you can browse through all of them to get closer. Sorry I can't offer more help.
Rick Byham, Microsoft, SQL Server Books Online, Implies no warranty