Looks like i was able to fix this issue on my own.
I tried many different things but what i ended up doing was the following :
Delete the SQMDB database and SQMDB_log ( located in program files\microsoft sql server\MSSQL10_50.MSSQLSERVER\MSSQL\DATA\)
Deleted qmuser
restarted sqlserver service (under sql server configuration manager)
recreated qmuser with sql authentication, selected dbcreator under server roles
Thanks