SQL Auth only should be ok.
Can you find the same error in your log file? It should have the full stack trace that will tell me where in the code it is failing, so I could probably give you a better idea what to check.
Can you try the membership request web part, and the other web parts and see if they work. How about creating a Role?
Also, maybe try to remove and redeploy. Probably won't fix anything, but can't hurt to try.
In the next version i'm going to add a page to check the configuration to help troubleshooting these types of issues.