I've been on 7.7.3 in dev for a while and have not seen this error. The day after I upgraded production to 7.7.3 I am seeing this error.

Are there any solutions other than SQL Passthru?

I have opened a case with IBI but still no luck.

The problem with this issue is this is not consistent. So, we can't enable the trace.

Yes it is very inconsistant - exactly why I have not opened a case. Yes after making one a SQL pass thru it works. The others I have are pretty complicated and have not changed yet. Kamesh keep us posted if you get a result with IBI. Does sound like a bit of a bug crawling around out in 7.7.03.

Seeing the same thing in Data Migrator today, for routines kicked off from the web console. We've been running jobs like this from the web console for years.

03/01/2013 15:02:09.758 I disconnect FDS
03/01/2013 15:02:11.743 I validated  t3rp9752     u=wfAdmin
03/01/2013 15:02:11.743 I processing gwrp720      u=wfAdmin,r=SRV
03/01/2013 15:02:11.758 I validated  t3rp10776    u=wfAdmin
03/01/2013 15:02:11.758 I DM: agent started (dmid=C4, proc=dc_form1_stage/23_stage_b_to_testresult_2, active)
03/01/2013 15:02:11.758 I request by t3rp9752 to notify disconnect of sesid=23
03/01/2013 15:02:11.758 I disconnect gwrp720      tscomid=3,sesid=23
03/01/2013 15:02:11.758 I processing cmrpsh999998 u=wfAdmin,r=SRV
03/01/2013 15:02:11.758 E error: <NGXX> xxsec_init:unable to init NTLM, connect explicitly with no password
03/01/2013 15:02:11.758 I request by cmrpcm000004 for explicit connect to agent (DEFAULT)
03/01/2013 15:02:11.758 I connecting cmrpcm000004 tscomid=1,sesid=25
03/01/2013 15:02:11.758 I DM: connected agent dmid=C4  tscomid=1,sesid=25
03/01/2013 15:02:11.758 I request by cmrpcm000004 for explicit connect to agent (DEFAULT)
03/01/2013 15:02:11.758 I connecting cmrpcm000004 tscomid=2,sesid=26
03/01/2013 15:02:11.758 W (EDA13089) rejected t3rp10932    u=wfAdmin (password failure)
03/01/2013 15:02:11.790 I accepting FDS connection tcp=::1:56348
03/01/2013 15:02:12.024 I request by t3rp10776 to notify disconnect of sesid=24
03/01/2013 15:02:12.024 I disconnect cmrpsh999998 tscomid=4,sesid=24
03/01/2013 15:02:12.024 I disconnect FDS
03/01/2013 15:02:13.212 I accepting  cmrpht000007 tcp=10.161.4.10:52624
03/01/2013 15:02:13.259 I request by cmrpht000007 for iwa connection
03/01/2013 15:02:13.259 I request by cmrpht000007 to exec <webconsole> u=wfAdmin, session=1362168092:1-1-0

Right now the error is very consistent for me, and its shown above. It's giving me a password failure for an admin account that provided the password on login. I had this problem a couple of weeks back and it disappeared, but now it's back.

I got this error today again, in an datamigrator process.
I am going to dive a bit deeper in the details, maybe I can find more in the log file
I will keep you informed and I wonder if after all these months if it is solved

Btw we are running 7.7.05