So first thing you can do is to make sure first that the account that you are using to connect to the SQL server is not locked out or expired. This shouldn't be the issue, if this was the issue you would be getting different errors but I have read online that this might be the issue (it was not the problem for me).
Next thing you should do, reboot all of your servers that are connecting to the SQL server and might be potentially causing the problems. If after you reboot all of your servers and the connection issues are still present then move on to the next possible solution. Sometimes rebooting will solve connection issues and it's worth a shot to at least try.
Another suggestion I read online was at Social MSDN, one user suggests that you use the SETSPN tool to delete and re-enter SPNS for your servers, this is a very tricky thing to do and I only suggest you try it if you know what you are doing. Read the suggestions at the link I provided, I didn't even try this because I didn't feel comfortable doing this type of thing to a production SQL server or my production MOSS 2007 SharePoint server. That being said some users state that the fix did indeed work so if you feel comfortable trying it out then go for it.
What I did finally try and that did work for me was a simple registry edit that isn't specifically stated to fix this issue but solved my problem. The edit is to disable loop back checking on the server, so that the server doesn't check for a connection that comes from itself to itself. To make the registry edit follow these steps:
Click Start
Click Run
Type regedit
Hit Enter
Navigate to the key HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa
Right-Click LSA
Choose New
Click DWORD Value
Type in Name DisableLoopbackCheck
Right-Click DisableLoopbackCheck
Click Modify
Enter 1 in Value Data
Click OK
Close Registry
Reboot Server
Once the server reboots check your log files and see if the errors are gone, if your problem was similar to mine then they should be resolved and you can get back to work. Well I hope this article helps you to solve the SSPI handshake failed with error code 0x8009030C
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