We have an ASP.NET application that we normally run under Forms Authentication using the ASP.NET Membership API. For a particular client we changed this to using Windows Authentication instead. On the production environment, we were running into the following exception:

A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: SQL Network Interfaces, error: 26 - Error Locating Server/Instance Specified)

We checked all the connection strings the app uses... all good. Finally, we figured out what was wrong. We had removed the Membership section from web.config so it was going back to the default in machine.config. That setting uses the LocalSqlServer connection string, which we don't use. However, in the default machine.config, this points to the App_Data folder using SQL Server Express. In most environments, this wouldn't be an issue immediately, because SQL Server Express would just create the  aspnet database and use that. However, in a hardened environment SQL Server Express is either not there (our case) or has no rights to create the App_Data folder and/or place create a new database. ASP.NET doesn't know this... it just can't access the SQL Server instance it is looking for, hence the above exception.