In mixed mode it should work without Trusted_Connection="yes" by using a sql login.
If your sql login was not dbo of the db I would try making him dbo.
With Trusted_Connection="yes" I'm not sure if its connecting to the db as you, the user logged into windows, or the aspnet account or iuser_machinename. I'd have to research it.
In any case if you changed the connection string since running the setup it could possibly be a factor in current issue as the context in which objects are created in the db can affect how they are used. I would try creating a new clean db and run setup again using your new connection string and see if it works better after that.
Hope it helps,
Joe