Error logging to database in Toad: "Login failed for user sa". (4273407)

There is no problem connecting to the same database via SQL Server 2000 Enterprise Manager. There was no problem in the past until running an ASP.NET web site. The web site locked up because the database locked up. After forcing ASP.NET and Visual Studio to close, then it was not possible to login into Toad anymore. From this point on, the error started to occur. The database resides on the local machine. There is no problem logging to other SQL Server databases on the machine, there is only one database having this problem.

These are the steps:

1) Open Toad.
2) Select database, enter password.
3) Press Connect.

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Exception Information
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Exception: System.Data.SqlClient.SqlException
Message : Login failed for user sa.
Stack Trace:
at System.Data.SqlClient.SqlInternalConnection.OnError(SqlException exception, Boolean breakConnection)
at System.Data.SqlClient.TdsParser.ThrowExceptionAndWarning(TdsParserStateObject stateObj)
at System.Data.SqlClient.TdsParser.Run(RunBehavior runBehavior, SqlCommand cmdHandler, SqlDataReader dataStream, BulkCopySimpleResultSet bulkCopyHandler, TdsParserStateObject stateObj)
at System.Data.SqlClient.SqlInternalConnectionTds.CompleteLogin(Boolean enlistOK)
at System.Data.SqlClient.SqlInternalConnectionTds.OpenLoginEnlist(SqlConnection owningObject, SqlConnectionString connectionOptions, String newPassword, Boolean redirectedUserInstance)

RESOLUTION1:

1. Close Toad and go to C:\Documents and Settings\<user profile>\Local Settings\Application Data\Quest Software folder
2.Rename Toad forSQL Server4.1 folder to Toad forSQL Server4.1backup. If this suggestion does not solve the issue, rename the Toad for SQL Server back to its original name.

RESOLUTION 2:

Close Toad and go to the above Toad for SQL Server 4.1 folder andrename Settings.xml to Settingsbackup.xml and Connections.xml to Connectionsbackup.xml