Crowlaw, can you verify if your systems are configured for FIPS compliancy?  The easiest way to check this is to look at this registry key: HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa\FipsAlgorithmPolicy\Enabled If this entry is set to 1 then I would recommend you try temporarily changing it to 0 to see if that lets you launch the SANHQ Client.
[IMAGE] I get this error after I tried upgrading and doing a fresh install of SAN HQ v2.5 on my SAN HQ server; but have no problem installing SAN HQ v2.2  The install seems to work fine, and when I try to open the SAN HQ client I receive the above error. I just built a new server and installed the new SAN HQ Server v2.5, and right when it finishes installing, I get the same above error.  Running Server 2008 R2. Any help will be greatly appreciated. 
Can't install/upgrade to SAN HQ v2.5 - Unexpected error - 