FYI, Found the problem.

Two problem, the logging to E: was not working (E: was subst drive done after starting SQL)

AND

The Value should not include [ ]. When I changed...

Attached is a version of the XML file I am using.

I have used two different formats for password one with = and one with :

I have seen both while searching...

If I setup the connection thru the connection Manager and do NOT have Package Configurations enabled, the connection works. When I enable package configurations with an XML file, the...

After configurating the connection, I press the test connection button and get the error.