Dexterity 12 and TFS 2012 not able to checkout a resource

I am trying to get TFS source control and Dexterity integrated. I have read and followed the steps as described in the "Using Microsoft Team Foundation Server 2012 with Microsoft Dexterity" white paper. I have successfully performed an initial check-in of the dictionary resources. What I am unable to do is now to perform a check-out. I receive the following in the Source Code Errors dialog: 

Level: Error Phase: Pulling Source Objects Message: Operation was not completed successfully

Is the TFS server the correct version for using with Dexterity version 12?

Thanks

MDA