An error has occurred while establishing a connection to the server. When connecting to SQL Server 2005, this failure may be caused by the fact that under the default settings SQL Server does not allow remote connections. (provider: SQL Network Interfaces, error: 26 – Error Locating Server/Instance Specified)

The database project requires an active database connection to load at design time. Probably it uses that to compile/verify scripts. The problem here is Visual Studio is not able to connect to any such instance. Following are few solutions (these worked for me)

1. Make sure the instance to which you want to connect is running and allows remote connections.
2. After performing step 1, if it is still not loading then you may need to start the SQL Browser Service. Make sure it’s running.
3. If the problem is still there, it has to be fixed from Visual Studio itself. Actually database project do not store to which instance it can connect. It’s a Visual Studio setting.In VS2008 go to Tool > Options > Database Tools > Design-time Validation Database > Connection Options. Specify your instance name here like “\SQLEXPRESS”

If the problem is still there post it to MSDN forums

Ankit

1. Visual Studio Add-Ins Every Developer Should Download Now, SmartPaster is very handful
2. Create a Debugger Visualizer in 10 Lines of Code: Explains writing debug visualizer. If you cannot read article, downloading binaries and installing the image visualizer would be surely helpful.
3. Line Counter
4. Opening solution folder, See class definition on MSDN2, Search in Google – All of these available at single right click,
5. Visual Studio IDE enhancements: Switch between C/CPP and H files, find document in the Solution Explorer, Cut and copy (plain text only)
6. Free SlickEdit® Gadgets: Auto-copy selection, Line ruler, Indentation guide
7. ZipStudio: Create Zip of you solution with single right click
8. Visual Studio 2005 add-in for sorting imports/using blocks
9. Resource Refactoring Tool: provides developers an easy way to extract hard coded strings from the code to resource files (donkey work )
10. Refactor! for ASP.NET 2.0 : 25 advanced refactoring tools in one package.

- Ankit