I have a small NAV 2016 (44365) two user system that has been running with NavUserPassword for about a year. Yesterday it suddenly stopped, and i can't figure out why.
The service itself is running fine, and if we use the service running with Windows Authentication we can access it just fine.
The error I get is the "A server was not found at net.tcp://localhost:7046/DynamicsNAV90/Service" .... I am trying to connect with the client installed on the server.
Both NavUserPassword and Windows service runs fine, and are visible from the developer client.
Thinking that there might have been some problem with the certificate I've tried creating new ones, creating services using these and updating the ClientUserSettings to match. But I get the same result. Services are visible in the development client, windows login works fine, NavUserPassword cannot find server.
I've tried swithing the login account on the service to network service, but that gives the same result/error.
The event log shows no error. Only the Warning about service principal names when the service starts.
If anybody has had similar problems, or have any suggestions, I would appreciate hearing from you.
Don't just take my word for it, test it yourself
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As a workaround I have have deleted all user (and related) records directly on SQL, and they now run on a service with Windows Authentication. Not really the clean and proper solution I would prefer or suggest to others....
Checking the updates, I see that the problem arose at the same time as Hotfix 4522 for SQL Server 2014 (KB4019099) was installed. As were 2 Security Updates for MS Windows (KB4034664) and (KB4034733) so likely linked to that, but as the customer wants to be updated on security it's hard to uninstall and check
These Windows Update are causing problem...
https://saurav-nav.blogspot.in/2015/11/microsoft-dynamics-nav-2016-how-to.html
I think this is helpful and solve your issue.
Few months ago, I encountered similar issue on NAV 2016 CU10 with windows accounts on Web Client. The problem was related to some SQL 2014 upgrade for security reasons. It was some TLS issue and I found a solution in a SQL Server forum. I can't find the link right now...
I believe your diagnosis is in the right direction.