For some reason when I changed the connection string parameters on my SSIS Catalog project I started getting a weird bug where the project fails connecting to the SAME server via a different with login failed error code. After some digging it looks like the project is trying to connect to the new IP via 'NT Authority\ANONYMOUS LOGIN' credentials instead of using the SQL Agent credential in the agent job. If I revert the connection string parameter back to the original IP (same server) there is no issues.
Well apparently this is a known bug:
https://connect.microsoft.com/SQLServer/feedback/details/727219/login-failure-message-during-ssis-2012-package-validation
And sadly it has not been fixed even with SQL 2012 SP1. Currently the easiest work around is scripting out the SSIS catalog job call and have EXECUTE AS LOGIN = 'domain\db service account' execute prior to the rest of the script.
Stupid issue but at least there is a work around. Hope this information can help someone else who is experiencing the same issues.
