Hi,
It seems Crystal report could not connect to the database. Check database is available or not, also make sure you have correct connection string.
Try to follow below steps from the application server to make sure you are able to connect the database and you are using the correct connection string.
1. Open a notepad file and save the file with the extension "test.udl".
2. DOuble click test.udl to open DataLink properties.
3. From the provider tab select the OLEDB provider for SQL database.
4. From the connection tab select/Type the servername and Provide User id and password if you have and select the database you want to use.
5. Click on test connection to test the connectivity and click OK
6. Right click test.udl and open it in notepad to check the connection string.
Also refer this article for more details about this error: sqlmusings.com/2009/03/11/resolving-a-network-related-or-instance-specific-error-occurred-while-establishing-a-connection-to-sql-server/
Regards,
Asheej T K