Note that if I select 'Use my current credentials', I can connect to the SQL server. However, if I use the same account and select 'Use alternate credentials' it doesn't work.
Also note that this service account is a local admin on the SQL Server and also a Server Admin within SQL. So there are no issues accessing databases on that SQL server using the service account in question.
I've seen some similar posts on the forum but none of the solutions work for us.