I need help!!! I have an asp application that reads an xml file daily, validates, and inserts the recoreds into SQL Server 2005. For months this has worked with no problem. Now when I run the script it works for the first 1000 records or so and then bombs with: [DBNETLIB][ConnectionOpen (Connect()).]SQL Server does not exist or access denied. I have searched the internet for help and tried different things. How can things work so well for so long and then stop? How can it work in the same script and then fail after a few records.

It could be the switch going off...or may be other connectivity issues...
Did you guys changed recently anything like OS patching etc...
if so rollback and test it...

And also check the following article...
You receive a "SQL Server does not exist or access denied" error message when you try to connect to a SQL Server named instance in a cluster by using TCP/IP sockets

a switch? I do not believe we changed OS patching...