So, we recently upgraded to version 3.1 and things started going to heck in a handbasket. I guess with 3.1 a bunch of new stuff starts to get done in TEMPDB, anyways it was not playing vary nicely.
We backed the upgrade off. After more investigating it looks like you want to follow this procedure to create a CHANGELOG database
After doing this, and editing RedGate_SQLSourceControl_Engine_EngineOptions.xml with the config line of
<?xml version=”1.0″ encoding=”utf-8″ standalone=”yes”?>
<EngineOptions version=”3″ type=”EngineOptions”>
Things started being happy again.