Error during upgrade PSA 7.6 -> 8.1.1

[eFactornet]

During the upgrade process from PSA 7.6.1 to 8.1.1 I always get an error:

1: Cannot connect to the server. Please check your connection settings and verify that SQL server is in the correct state.

I've checked the SQL server and it is up and running (MSDE 2005).

Any idea to have this fixed.

Thanks,