Sharepoint Kerberos Configuration

I have a sandbox domain consisting of 3 virtual machines running on a virtual network

sandboxweb - Sharepoint server running a app under http://reads.sandboxdomain.network. Machince has been trusted for delegation.
sandboxsql - Sharepoint SQL server. Machince has been trusted for delegation.
sandboxdc  - Domain Controller

I am trying to get Kerberos working so I can fetch external (from Sharepoint) data from the SQL server. 
//C# snippet is used to test kerberos.
string connectionString = "Data Source=sandboxsql;Initial Catalog=MyDatabase;Integrated Security=True";
using (SqlConnection connection = new SqlConnection(connectionString))
{
connection.Open();
}

Managed Service Accounts - Both have been configured for Constrained Delegation
1) sharepointfarmacct - account for the Sharepoint App Pool
2) sharepointsqlacct  - SQL Account

Output SetSPN:
setspn -L sharepointfarmacct
Registered ServicePrincipalNames for CN=SharePointFarmAcct,CN=Managed Service Accounts,DC=sandboxdomain,DC=net:
HTTP/reads
HTTP/reads.sandboxdomain.net

setspn -L sharepointsqlacct
Registered ServicePrincipalNames for CN=SharePointSQLAcct,CN=Managed Service Accounts,DC=sandboxdomain,DC=net:
MSSQLSvc/sandboxsql.sandboxdomain.net:1433
MSSQLSvc/sandboxsql:1433

Output from klist:
#0>     Client: joeadmin @ SANDBOXDOMAIN.NET
        Server: krbtgt/SANDBOXDOMAIN.NET @ SANDBOXDOMAIN.NET
        KerbTicket Encryption Type: RSADSI RC4-HMAC(NT)
        Ticket Flags 0x40e00000 -> forwardable renewable initial pre_authent
        Start Time: 4/29/2013 8:45:38 (local)
        End Time:   4/29/2013 18:45:38 (local)
        Renew Time: 5/6/2013 8:45:38 (local)
        Session Key Type: RSADSI RC4-HMAC(NT)

#1>     Client: joeadmin @ SANDBOXDOMAIN.NET
        Server: host/sandboxsql.sandboxdomain.net @ SANDBOXDOMAIN.NET
        KerbTicket Encryption Type: AES-256-CTS-HMAC-SHA1-96
        Ticket Flags 0x40a00000 -> forwardable renewable pre_authent
        Start Time: 4/29/2013 8:46:33 (local)
        End Time:   4/29/2013 18:45:38 (local)
        Renew Time: 5/6/2013 8:45:38 (local)
        Session Key Type: AES-256-CTS-HMAC-SHA1-96

#2>     Client: joeadmin @ SANDBOXDOMAIN.NET
        Server: RPCSS/SANDBOXSQL.sandboxdomain.net @ SANDBOXDOMAIN.NET
        KerbTicket Encryption Type: AES-256-CTS-HMAC-SHA1-96
        Ticket Flags 0x40a00000 -> forwardable renewable pre_authent
        Start Time: 4/29/2013 8:46:33 (local)
        End Time:   4/29/2013 18:45:38 (local)
        Renew Time: 5/6/2013 8:45:38 (local)
        Session Key Type: AES-256-CTS-HMAC-SHA1-96

#3>     Client: joeadmin @ SANDBOXDOMAIN.NET
        Server: MSSQLSvc/sandboxsql.sandboxdomain.net:1433 @ SANDBOXDOMAIN.NET
        KerbTicket Encryption Type: RSADSI RC4-HMAC(NT)
        Ticket Flags 0x40a00000 -> forwardable renewable pre_authent
        Start Time: 4/29/2013 8:46:32 (local)
        End Time:   4/29/2013 18:45:38 (local)
        Renew Time: 5/6/2013 8:45:38 (local)
        Session Key Type: RSADSI RC4-HMAC(NT)

#4>     Client: joeadmin @ SANDBOXDOMAIN.NET
        Server: host/sandboxweb.sandboxdomain.net @ SANDBOXDOMAIN.NET
        KerbTicket Encryption Type: AES-256-CTS-HMAC-SHA1-96
        Ticket Flags 0x40a00000 -> forwardable renewable pre_authent
        Start Time: 4/29/2013 8:45:38 (local)
        End Time:   4/29/2013 18:45:38 (local)
        Renew Time: 5/6/2013 8:45:38 (local)
        Session Key Type: AES-256-CTS-HMAC-SHA1-96

Net Monitor Output:

Output from SQL Manager using this query: "select auth_scheme from sys.dm_exec_connections where session_id=@@spid"
"KERBEROS"

Sharepoint Reports this error: "Login failed for user 'NT AUTHORITY\ANONYMOUS LOGON'"

MSSQL reports this error: Login failed for user 'NT AUTHORITY\ANONYMOUS LOGON'. Reason: Token-based server access validation failed with an infrastructure error. Check for previous errors.

Any help would be appreciated!!!

Joseph