Interesting! I am installing this server in a lab so its on a different SQL Server than our Production SSO Server. That is the only thing that is different. The rest of my install is exactly like yours which matches my Production SSO Server. Going to talk to the DBA and see what is different of the two SQL Instances.
I need this answered because I will be building a second production site in about two weeks with its own SSO and SQL Server. Very good chance the error could follow.