Help Logging In on SL4 Business Application template

Situation:
I have created a New Project using Vis Web Dev 2010 Express, using the SilverLight 4 Business Application template (because I like the Authentication tools provided). I Build, run, test on local machine fine. By 'fine' I mean creating new user with the Login procedure, logout, login, etc.. It all works with the project defaults (nothing special added).

I am also able to successfully web-deploy the project to my hosted domain (by DASP of course!). I followed the DASP KB instructions to Copy-local a couple of references: System.ServiceModel.DomainServices.Hosting and System.ServiceModel.DomainServices.Server. (The 'service model entity framework' is not listed in my set of references).

I have included the aspnetdb.mdf file in the project - so that it gets copied to the server in the ./App_Data folder.

I have added the following lines to my web.config file:
<security>
<authentication>
<basicAuthentication enabled="false" />
</authentication>
</security>

and...

<connectionStrings>
<clear />
<remove name="LocalSqlServer" />
<add name="LocalSqlServer" connectionString="Data Source=.\App_Data\;Initial Catalog=aspnetdb;" providerName="System.Data.SqlClient" />
</connectionStrings>

(I suspect that the bolded text may be my problem) (?)

The app starts-up ok at: http://www.jimbarrlive.com/BusApp2TestPage.aspx

Problem:
When I click on Login, and attempt to Create a new user, I get the following error message: "Invoke operation 'CreateUser' failed. A network related of instance-specific error occurred while establishing a connection to SQL server. The server was not found or was not accessible. Verify that the instance name is correct and the SQL server is configured to allow remote connections. (provider: SQL Network Interfaces, error: 26-Error locating server/Instance specified).

This should be an easy one (for an expert, which I am not). Can someone please help me?

Thanks,

Jim