Microsoft finally reported that GP uses ADO.NET (a Dexterity Shared Component) to reconnect to SQL in Document Management Attachment and the Dexterity setup maybe causing the problem. After additional research by myself and this info, I was able to solve the problem by changing my ODBC server name in ODBC Data Source Administrator from (server name, port) to (server name\instance name, port) whereby including the name of the 2nd instance running on SQL. I assume GP strips this info from the ODBC to create the connection string and now I have a valid connection string! :)
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