Here is cli_3840.trc (part 2):
[03-AUG-2006 09:54:50:125] NAMES.DIRECTORY_PATH = (TNSNAMES, ONAMES, HOSTNAME)
[03-AUG-2006 09:54:50:125] SQLNET.AUTHENTICATION_SERVICES = (NTS)
[03-AUG-2006 09:54:50:125] --- PARAMETER SOURCE INFORMATION ENDS ---
[03-AUG-2006 09:54:50:125]
--- LOG CONFIGURATION INFORMATION FOLLOWS ---
[03-AUG-2006 09:54:50:125] Log stream will be "C:\Source\sqlnet.log"
[03-AUG-2006 09:54:50:125] Log stream validation not requested
[03-AUG-2006 09:54:50:125] --- LOG CONFIGURATION INFORMATION ENDS ---
[03-AUG-2006 09:54:50:125] nigini: Count in NI global area now: 1
[03-AUG-2006 09:54:50:125] nigini: Count in NI global area now: 1
[03-AUG-2006 09:54:50:125] nrigbni: Unable to get data from navigation file tnsnav.ora
[03-AUG-2006 09:54:50:156] niotns: niotns: setting up interrupt handler...
[03-AUG-2006 09:54:50:156] niotns: Not trying to enable dead connection detection.
[03-AUG-2006 09:54:50:156] niotns: Calling address: (DESCRIPTION=(ADDRESS_LIST=(ADDRESS=(PROTOCOL=BEQ)(PROGRAM=oracle)(ARGV0=oracleORCL)(ARGS='(DESCRIPTION=(LOCAL=YES)(ADDRESS=(PROTOCOL=beq)))')))(CONNECT_DATA=(SID=ORCL)(CID=(PROGRA M=C:\Source\Project1.exe)(HOST=BENNY)(USER=Owner))))
[03-AUG-2006 09:54:50:156] nscall: connecting...
[03-AUG-2006 09:54:50:203] nsopen: opening transport...
[03-AUG-2006 09:54:50:218] nserror: nsres: id=0, op=65, ns=12560, ns2=0; nt[0]=530, nt[1]=126, nt[2]=0; ora[0]=0, ora[1]=0, ora[2]=0
[03-AUG-2006 09:54:50:218] nsopen: unable to open transport
[03-AUG-2006 09:54:50:218] nioqper: error from nscall
[03-AUG-2006 09:54:50:218] nioqper: nr err code: 0
[03-AUG-2006 09:54:50:218] nioqper: ns main err code: 12560
[03-AUG-2006 09:54:50:218] nioqper: ns (2) err code: 0
[03-AUG-2006 09:54:50:218] nioqper: nt main err code: 530
[03-AUG-2006 09:54:50:218] nioqper: nt (2) err code: 126
[03-AUG-2006 09:54:50:218] nioqper: nt OS err code: 0
[03-AUG-2006 09:54:50:218] niqme: reporting NS-12560 error as ORA-12560
[03-AUG-2006 09:54:50:218] niomapnserror: returning error 12560
[03-AUG-2006 09:54:50:218] niotns: Couldn't connect, returning 12560
[03-AUG-2006 09:54:50:265] nigtrm: Count in the NI global area is now 0
[03-AUG-2006 09:54:50:265] nigtrm: Count in the NL global area is now 0
And here is sqlnet.log:
***********************************************************************
Fatal NI connect error 12560, connecting to:
(DESCRIPTION=(ADDRESS=(PROTOCOL=BEQ)(PROGRAM=oracle)(ARGV0=oracleORCL)(ARGS='(DESCRIPTION=(LOCAL=YES)(ADDRESS=(PROTOCOL=beq)))'))(CONNECT_DATA=(SID=ORCL)(CID=(PROGRAM=C:\Source\Pro ject1.exe)(HOST=BENNY)(USER=Owner))))
VERSION INFORMATION:
TNS for 32-bit Windows: Version 9.2.0.1.0 - Production
Oracle Bequeath NT Protocol Adapter for 32-bit Windows: Version 9.2.0.1.0 - Production
Time: 03-AUG-2006 09:54:50
Tracing to file: C:\Source\cli_3840.trc
Tns error struct:
nr err code: 0
ns main err code: 12560
TNS-12560: TNS

rotocol adapter error
ns secondary err code: 0
nt main err code: 530
TNS-00530: Protocol adapter error
nt secondary err code: 126
nt OS err code: 0