If the status of a SQL Server instance displayed on the Monitored servers configuration page is Connection failed - Cannot connect, and the exception message in the log file contains "Cannot generate SSPI context", do the following:

Stop your SQL Server service

1. Open the Services Microsoft Management Console (MMC) (Control Panel > Administrative Tools > Services).
2. Double-click on the SQL Server service and on the General tab, click Stop.

Restart using the Local System account and then stop it again

1. In the Log On tab, select Local System account and click OK.
2. On the General tab, click Start.
3. Once the Service status is confirmed as Started, click Stop.

Switch back to your domain account and restart

1. In the Log On tab, select This account.
2. Enter your SQL Server domain account details and click OK.
3. On the General tab, click Start.

Retry the connection in SQL Monitor

At the Monitored servers page (Configuration > Monitored servers), select Retry connection from the Actions list for the SQL Server instance:

For more information, see http://blogs.msdn.com/b/sql_protocols/archive/2005/10/15/481297.aspx.