There is a problem communicating with the Microsoft Dynamics CRM Server

We received this error while trying to configure the CRM Outlook Client for CRM 2011:

This was from a machine where we were able to connect to CRM 2011 using Internet Explorer so it was a little perplexing why we should be receiving a communication error as indicated in the error message issued above.

In order to resolve, the following steps were taken:

1. Enabled Tracing by going to Start | Microsoft Dynamics CRM | Troubleshooting tab and enabled tracing
2. After reproducing the error retrieve the trace files from %Userprofile% \Local Settings\Application Data\Microsoft\MSCRM\Traces
3. Analyzed the trace file to find the source of the error

It turns out that in our case there was an errant plugin that was causing the error as indicated in the logs:

In this case, we had upgraded from CRM 4.0 and although the plugin above still worked (using IE navigation), it apparently was troubling the CRM Outlook Client for reasons that are not entirely understood. Anyway, disabling/removing the plugin resolved the CRM connection error that we were experiencing.

In conclusion, it turns out of course that the error message itself was a little misleading because as we discovered - the issue was related to a wayward plugin rather than connectivity.