Cannot connect Workbench from Windows pc to Windows server (1 reply)

Running Windows 7 pro on pc (let's call it workstation 1)
Running Small Business Server 2008 on the Windows server (let's call this ML350)
WorkBench can successfully connect to localhost if I am logged in directly on the ML350 server so I know the MySql service is running and WorkBench on the server is working well.
The problem is connecting from workstation 1 to the ML350 server.
I have done the following:
- Created outbound rule on workstation 1 for port 3306
- When I execute the command “telnet ml350 3306” telnet says it can successfully communicate so I know ports are not an issue.
- When I attempt to create a connection in WorkBench to ML350, I enter:
. Connection name: Test1
. Connection method is standard (tcp/ip)
. Hostname is ML350
. Port is : 3306
. username is : root

When I click on “test connection” , the dialog asks for the password. I enter it and click on OK and get the error message:
“ Failed to connect to MySQL at ML350:3306 with user root.”

I have tried replacing the hostname with the ip address of ML350 server and get the same message.

What am I missing ? How do I solve this?