It is likely that when you installed the WCF service you entered the AD Administrator credentials as a connection authorisation to SQL server. Therefore you now have the situation where WCF cannot authenticate to the SQL server. You may have the same error when applying the policy from the management console. To fix either reinstall the WCF service and supply the new credentials or just go in to the DLP Policy console and go to Tools, Options then use the button [Update DB Credentials].
That should get you back to normal,.
McAfee DLP TierIII