Ran into this issue during a new SP 2010 install this week:
“SQL Server SSPI handshake failed with error code 0x8009030c”
Took awhile to figure out but I was able to solve it by making a Local Security Policy change on the SQL box:
Go to Local policies | User rights assignment | Access this computer from the network and add the account(s) that are trying to login to SQL.
Credit to link for the info.