I got this error when doing a fresh install of Project Server 2003 and Project Pro, after correcting the error in the previous blog entry (here). Both project pro and server were installed on the same machine (I know, but I was short on machines), so the standard issues of network connectivity didn't seem to be a relevant factor in getting the error. After much searching and testing, I finally found the cause:

Project Server 2003 had Service Pack 1 applied to it. Project Pro did not have Service Pack 1 applied to it. When I applied SP1 to project pro, everything worked like a champ. This took me almost a day of searching and testing to figure out the error.

Maybe I'm just slow, but this should have been easy but was not :)