Hi,
On searching our records, it seems the solution is to add the DisableLookbackCheck.
On load balanced servers you might encounter an issue installation DBXL; this is an issue encountered for any web service, not just DBXL. The issue is well described in the following link:
http://blog.crsw.com/2008/10/14/unauthorized-401-1-exception-calling-web-services-in-sharepoint/
Microsoft Support also discusses the issue here:
http://support.microsoft.com/default.aspx?scid=kb;EN-US;896861
To install DBXL:
• Add the DisableLoopbackCheck registry entry discussed in this Microsoft KB article. Note: you will need to reboot your server before the DisableLoopbackCheck takes effect.
• Be sure to add your load balanced host name for your web farm to the Hosts file on each front end web server. Use the loop-back IP address (127.0.0.1). This will ensure that each web server looks at itself to access the web services preventing any trips back out to the load-balancer – and possibly calling the web service another web server in the farm. This will be much less efficient.
If this problem appeared to be inconsistent (sometimes erroring, sometime successful), this is most likely due having multiple web servers. The call to the web service will be successful if by chance the load balance redirected the call to the same (self) web server to access the web service. It will fail when trying to call across to a different web server.