Hi,
A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible.
Sounds like an issue of service reliability with SqlAzure.
When I test it on my local machine I do not get this error, though I have seen errors like this a few times in the course of my testing over a period of weeks but they are not frequent issues and I assume they are basically issues with the service itself. The service is a community technology preview so I expect occasional glitches. But this really is the challenge of cloud computing, can they really deliver on service reliability and uptime. Hopefully it will be very reliable when it becomes a production/commercial service.
Best,
Joe