We received a similar situation after creating test databases with copies of live data. We updated the test databases as per the instructions on creating a test database and ran all the necessary queries, synchs, etc. We ran through every scenario we could locate, but all users (other than sysadmin) would be prompted for the E8 password when running any report.

It was necessary to delete the test databases before we could get past this issue.

Is there a known issue with copies of live databases on SQL 2012?

Any thoughts would be greatly appreciated.