Does anyone know how to resolve this exception.

Exception:

Message: Communication with the underlying transaction manager has failed.

Stack Trace:

System.Transactions.TransactionManagerCommunicationException: Communication with the underlying transaction manager has failed. ---> System.Runtime.InteropServi

ces.COMException (0x80004005): Error HRESULT E_FAIL has been returned from a call to a COM component.

Hey Armo,

MSDTC will need to be allowed through any firewalls on both machines as will port 134 (the RPC endpoint mapper). Check to make sure these things are setup properly and let me know if it's still failing.

To expand on what is happening here:
As you mentioned, this isn't thrown until after you attempt to open the second connection.  SqlClient uses the Transaction Management Escalation feature of System.Transactions when dealing with Sql 2005 (also known as PromotableSinglePhaseEnlistment).  During the first connection the Commit of the Transaction is delegated to the escalateable enlistment (i.e. to SQL and its internal Transaction), so msdtc is not involved.  When you attempt to open the second connection, SqlClient takes an action that forces us to escalate, or promote the management of the Transaction to msdtc.  In doing so, we ask SQL to promote its internal Transaction to an msdtc Transaction.  Sql does so on the server side and return to us on the client side a marshalled version of the msdtc Transaction.  The last frame you see on the call stack of the exception is System.Transaction attempting to use this to Receive the Transaction from the server side.  This requires us to communicate with the msdtc instance on the server machine.  I beleive the firewall is preventing that and thus the TransactionManagerCommunicationException.

hth,
Miguel

Thanks Miguel.

Configured the DTC as described in the technical artical,

http://msdn.microsoft.com/library/default.asp?url=/library/en-us/dndcom/html/msdn_dcomfirewall.asp

and as in the Component Services help
Component Services -> Help -> Component Services Administration Help
-> Administering Distributed Trasnactions -> Distributed Transaction Administration Tasks
-> Configuring MS DTC -> Configuring MS DTC to work Through a Firewall

These documents recommend to use the port id 135. However it works on both 134 and 135 [the RPC endpoint mapper].

On the server, configured the RPC, HKEY_LOCAL_MACHINE\Software\Microsoft\Rpc\Internet

Name Type Value
----------------------- -------------- ----------
Ports REG_MULTI_SZ 3000-4000
134
PortsInternetAvailable REG_SZ Y
UseInternetPorts REG_SZ N

Note: firewall is off on the client.

It works just fine now.

Question, the Internet-accessible ports pose any security risk? How to mitigate them?