LSCopy job fails on SQL Server 2005 - Insufficient space I'm having some trouble getting my LSCopy job of Log-Shipping on my SQL Server 2005 server, to work.

The LSBackup job is configured so the backup is made locally (D: drive)

The LSCopy job is configured to copy from the primary (\server_name\d$) and copies it locally to the secondary server.

The LSRestore is restores the local copy to the secondary database with NORECOVERY

The LSBackup job runs fine, copies the file to the location specified.

The LSCopy job fails. The error message states that it goes to the source for settings. Gets the settings (I assume) then begins the copying. 

This errors saying:


  Error: Not enough server storage is available to process this command.


What I'm not sure about is whether the destination folder needs to be a network share, or if just \server_name\d$ is accepted.

Any help will be really appreciated!
The destination path for the LSCopy job has to be an UNC Path for all practical purposes, to make things simpler to debug I would reccomend not to use the default \d$ shares as you will have to change the permissions on them but connecting to \localhost\c$ is a network connection. Now the error


  ***Error: Not enough server storage is available to process this command.


Is an operating system error. but not an error from the SQL Server. You are probably starving the computer on memory or having some network issues, If on Windows Server 2003 a quick reboot of the secondary server will fix this temporary and then I would look into memory settings on the server