Failure of Dataguard duplicate to standby database script

Platform: Windows 2003
Oracle Ver: 11.1.0.7

Problem Description:
I have done this procedure a few times on different windows 2003 machines and once before on the same machine. I know password files are the same, I am a admin on both machines, I am in the ora_dba group and I know to use fully qualified connections and not just the /. When I run my script to duplicate the database to a standby database it fails with these errors:
RMAN-03009: failure of backup command on c1 channel at 01/28/2010 07:07:00
ORA-17629: Cannot connect to the remote database server
ORA-17627: ORA-01031: insufficient privileges

Here is a copy and run of the script:

RMAN> connect target sys/Password@Dalp11g

connected to target database: DALP11G (DBID=3657016884)

RMAN> connect auxiliary sys/Password@DALS11G

connected to auxiliary database: DALS11G (not mounted)

RMAN>

RMAN> run {
2> allocate channel c1 type disk;
3> allocate auxiliary channel s1 type disk;
4>
5> duplicate target database
6> for standby
7> from active database
8> dorecover spfile
9> parameter_value_convert 'DALP11G','DALS11G'
10> set db_unique_name='DALS11G'
11> set db_file_name_convert='E:\Oracle11\oradata\dalp11g','E:\Oracle11\orad
ata\DALS11G'
12> set log_file_name_convert='E:\Oracle11\oradata\dalp11g','E:\Oracle11\fla
sh_recovery_area\DALS11G\ONLINELOG'
13> set control_files='e:\oracle11\oradata\dals11g\control01.ctl'
14> set db_recovery_file_dest='E:\Oracle11\flash_recovery_area\DALS11G'
15> set diagnostic_dest='E:\Oracle11'
16> set fal_client='DALS11G'
17> set fal_server='DALP11G'
18> set standby_file_management='AUTO'
19> set log_archive_config='DG_CONFIG=(dalp11g,dals11g)'
20> set log_archive_dest_1='LOCATION=E:\Oracle11\flash_recovery_area\DALS11G
\ARCHIVELOG mandatory alternate=log_Archive_dest_2'
21> set log_archive_dest_2='SERVICE=dalp11g lgwr sync affirm valid_for=(all_
logfiles,all_roles) db_Unique_NAME=dals11g'
22> set log_archive_dest_state_2='ENABLE'
23> set log_archive_format='dals11g_%t_%s_%r.arc'
24> ;
25> sql channel c1 "alter system archive log current";
26> sql channel s1 "alter database recover managed standby database using curren
t logfile disconnect";
27> sql channel c1 "alter database set standby to maximize availability";
28> }

using target database control file instead of recovery catalog
allocated channel: c1
channel c1: SID=105 device type=DISK

allocated channel: s1
channel s1: SID=94 device type=DISK

Starting Duplicate Db at 28-JAN-10

contents of Memory Script:
{
backup as copy reuse
file 'E:\Oracle11\product\11.1.0\db_1\DATABASE\PWDdalp11g.ORA' auxiliary for
mat
'E:\Oracle11\product\11.1.0\db_1\DATABASE\PWDdals11g.ORA' file
'E:\ORACLE11\PRODUCT\11.1.0\DB_1\DATABASE\SPFILEDALP11G.ORA' auxiliary format
'E:\ORACLE11\PRODUCT\11.1.0\DB_1\DATABASE\SPFILEDALS11G.ORA' ;
sql clone "alter system set spfile= ''E:\ORACLE11\PRODUCT\11.1.0\DB_1\DATABAS
E\SPFILEDALS11G.ORA''";
}
executing Memory Script

Starting backup at 28-JAN-10
RMAN-03009: failure of backup command on c1 channel at 01/28/2010 07:07:00
ORA-17629: Cannot connect to the remote database server
ORA-17627: ORA-01031: insufficient privileges
ORA-17629: Cannot connect to the remote database server
continuing other job steps, job failed will not be re-run
released channel: c1
released channel: s1
RMAN-00571: ===========================================================
RMAN-00569: =============== ERROR MESSAGE STACK FOLLOWS ===============
RMAN-00571: ===========================================================
RMAN-03002: failure of Duplicate Db command at 01/28/2010 07:07:01
RMAN-03015: error occurred in stored script Memory Script
RMAN-03009: failure of backup command on c1 channel at 01/28/2010 07:07:01
ORA-17629: Cannot connect to the remote database server
ORA-17627: ORA-01031: insufficient privileges
ORA-17629: Cannot connect to the remote database server