Error: Could not connect to database

The following error is encountered while trying to Host the site from IIS ..
" The Assembly Version ([ASSEMBLY VERSION]) does not match the Database Version ([DATABASE VERSION]).
"Error: Could not connect to the database specified in the connection string for SqlDataProvider. "

We have 2 different machines, over which we have 2 different SQL Server.
In Web.Config, if we give server=server1 it works well and there is no problem at all...
if we give server=server2, and executehttp://localhost/application, the above mentioned error occurs..

and yes the application is hosted on 3rd machine......

Can anyone throw some light on this regard.
Its urgent.

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