I encountered yet another MSDTC issue when talking to a remote SQL Server database following a BizTalk 2006 development environment upgrade from Windows Server 2003 Ent. Ed. to Service Pack 1.
The usual ‘Mutual authentication required’ / ‘No Authentication Required’ problem reared its head, and although this needed to be resolved, I was still receiving the ‘New transaction cannot enlist in the specified transaction coordinator‘ error when BizTalk attempted to do anything involving a distributed transaction. Even with a fresh installation and reconfiguration of MSDTC, I still couldn’t successfully run the DTCPing tool - the RPC test ran fine, but the Binding test failed every time:

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