Hi,
Possible cause of this exceptions are,
1) Your ConnectionString is incorrect. (high probability)
2) Your Database not exist on the specified location.
3) Your database service on server is not allowing network access. or database service is off.
[EDIT]
Refer :
http://support.microsoft.com/kb/914277[
^] for allowing network access.(if this is the case)
[/EDIT]
Hope you find this information helpful
Thanks
-Amit Gajjar