I should have posted back to this a while ago.
The issue, David is correct, is NOT RDM. it is MSSQL server.
If you supply a username and password to MSSQL in a connection string it thinks that you mean to authenticate via the MSSQL server and tries to do so.
If you use integrated security it simply passes the security token onto the AD.
There is no step in between that allows MSSQL to authenticate a user via the AD with the give text username and password.
The issue, David is correct, is NOT RDM. it is MSSQL server.
If you supply a username and password to MSSQL in a connection string it thinks that you mean to authenticate via the MSSQL server and tries to do so.
If you use integrated security it simply passes the security token onto the AD.
There is no step in between that allows MSSQL to authenticate a user via the AD with the give text username and password.