Installation of SQLserver2008 cluster might fail on windows2008 with error mentioned below

The cluster resource ‘SQL Server’ could not be brought online.
Error: The group or resource is not in the correct state to perform the requested operation. (Exception from HRESULT: 0x8007139F)

Root Cause

This problem occurs because of a new security feature named Loopback check functionality. By default, loopback check functionality is turned ON in Windows and the value of the DisableLoopbackCheck registry entry is set to 0 (zero).
http://support.microsoft.com/kb/957097/

With this feature being turned ON: windows do not allow NTLM authentication if we try to access server from Local server using a name which is not its Net-Bios name (or) IPAddress.

When SQL Server Agent is started, SQL Agent resource access the SQL Server using SQL  VirtualServer name and hence we do not allow NTLM. So the SQL Server Agent would fail and the SQLServer Agent Resource creation would also fail.

SQL Server resource will fail to come Online because, IsAlive check will be done using NTLM Authentication i.e: Cluster service startup account resolves as NT AUTHORITY\ANONYMOUS LOGON when connecting to SQL Server for IsAlive check and the connection fails.

We will not get in to this issue if startup account of SQL Server has permissions to read and write SPN’s.

After the installation fails you will see the SQL Server resource is created but not the SQL Agent resource.

There are three ways to resolve this issue.

Option 1

1. After the failure, create the SPN’s manually using SetSPN tool (or) Configure SQL Server service to create SPNs dynamically for the SQL Server instances (Refer KB: 811889)

Example for creating SPN’s manually:
SETSPN -A MSSQLSVC/VSName.XX.XX.EDU:1433
SETSPN -A MSSQLSVC/VSName.XX.XX.EDU

2. Bring the SQL Server Resource online.

3. Create the SQL Server Agent resource type.

{
To add the sql server agent resource type execute the below command:

cluster restype “SQL Server Agent” /create /DLL:sqagtres.dll .Once done we got the
update that the Resource type ‘SQL Server Agent’ created.
}

4. Create SQL Server agent resource manually.

We need to make sure that the newly created SQL server Agent resource have the virtualservername and Instance name .

To add this property go to “failover cluster management” ==>SQL Server Agent Resource==>Properties==>properties
check for the two parameters (virtualservername and Instancename) and fill in the
details.

}

5. Change configuration reg_dword values of all components to 1 in below registry path

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Microsoft SQL Server\MSSQLX.MSSQLSERVER\ConfigurationState

Option 2

1. Do a Complete uninstall of failed installation (or) Configure SQL Server service to create SPNs dynamically for the SQL Server instances (Refer KB: 811889) and move to Step 3.

2. Create the SPN’s before we do the installation. —

Example:
SETSPN -A MSSQLSVC/VSName.XX.XX.EDU:1433
SETSPN -A MSSQLSVC/VSName.XX.XX.EDU

Note:Beginning with SQL Server 2008, the SPN format is changed and new SPN format does not require a port number Refer: http://msdn.microsoft.com/en-us/library/ms191153.aspx

3. Then install the SQL Server on cluster

Option 3 (Recommended)

1. Disable the authentication loopback check by setting the DisableLoopbackCheck value in
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa registry subkey to 1.
To set the DisableLoopbackCheck registry entry to 1, follow below steps on all nodes of cluster.

a. Click Start, click Run, type regedit, and then click OK.
b. Locate the following registry path:
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa
c. Right-click Lsa, select New, and then click DWORD Value.
d. Type DisableLoopbackCheck, and then press ENTER.
e. Right-click DisableLoopbackCheck, and then click Modify.
f. In the Value data box, type 1, and then click OK.

2. Restart the system.

3. Do complete uninstall and re-run the setup(or) Follow the steps from step2 in option 1.

Note:

1. We will encounter above error if we are installing the named instance of SQL Server and SQL Server browser is in stopped state. 

2.  If you have installed SQLServer 2012 (Denali) and uninstalled it on same cluster. You might encounter above issue. Refer below link for   details.

https://mssqlwiki.com/2012/01/31/sql-server-resource-fails-to-come-online-is-alive-check-fails/

Regards

Karthick P.K