I had this happen and it turned out the Test Connection button worked, but the path in the SQL Settings utility was using [local], instead of the actual server name. It sounds like this might not apply to your situation, as your Citrix server is unlikely to also be your SQL server - but I just wanted to throw this out there. I guess this falls under the "Incorrectly named SQL instance" cause.

Morning Cullen

I checked the instance name when running the utility and it was correct, well it was actually the fully qualified domain name of the SQL server. 

Figured as much. Checked all the protocols? Named Pipes and everything?

Yeah, all the SQL settings are good. I think they need to adjust firewall settings on the Citrix Server. 

Greetings from your old friends at B**Y. I'm upgrading them now.