Update :

From Event Log

Component: Tridion.ContentManager.CoreService
Errorcode: 0
User: NT AUTHORITY\NETWORK SERVICE

StackTrace Information Details:
   at System.Data.ProviderBase.DbConnectionPool.TryGetConnection(DbConnection owningObject, UInt32 waitForMultipleObjectsTimeout, Boolean allowCreate, Boolean onlyOneCheckConnection, DbConnectionOptions userOptions, DbConnectionInternal& connection)
   at System.Data.ProviderBase.DbConnectionPool.TryGetConnection(DbConnection owningObject, TaskCompletionSource`1 retry, DbConnectionOptions userOptions, DbConnectionInternal& connection)
   at System.Data.ProviderBase.DbConnectionFactory.TryGetConnection(DbConnection owningConnection, TaskCompletionSource`1 retry, DbConnectionOptions userOptions, DbConnectionInternal oldConnection, DbConnectionInternal& connection)
   at System.Data.ProviderBase.DbConnectionInternal.TryOpenConnectionInternal(DbConnection outerConnection, DbConnectionFactory connectionFactory, TaskCompletionSource`1 retry, DbConnectionOptions userOptions)
   at System.Data.SqlClient.SqlConnection.TryOpenInner(TaskCompletionSource`1 retry)
   at System.Data.SqlClient.SqlConnection.TryOpen(TaskCompletionSource`1 retry)
   at System.Data.SqlClient.SqlConnection.Open()
   at System.Data.SqlClient.SqlConnection.Open()
   at Tridion.ContentManager.Data.AdoNet.DatabaseUtilities.GetConnection()
   at Tridion.ContentManager.Data.AdoNet.DatabaseUtilities.ExecuteReader(StoredProcedureInvocation storedProcedureInvocation, Nullable`1 commandBehavior)
   at Tridion.ContentManager.Data.AdoNet.SystemDataMapper.Tridion.ContentManager.Data.ISystemDataMapper.GetListClaimMappings(ClaimMappingsFilterData filter)
   at Tridion.ContentManager.Security.AuthorizationManager.GetListClaimMappingData()
   at Tridion.ContentManager.Security.AuthorizationManager.LoadAccessToken(IEnumerable`1 claims)
   at Tridion.ContentManager.Session..ctor(IEnumerable`1 claims)
   at Tridion.ContentManager.CoreService.SessionHelper.GetCurrentSession()
   at Tridion.ContentManager.CoreService.CoreServiceBase.get_CurrentSession()
   at Tridion.ContentManager.CoreService.CoreServiceBase.GetDefaultData(ItemType itemType, String containerId, ReadOptions readOptions)
   at Tridion.ContentManager.CoreService.CoreServiceBase.GetDefaultData(ItemType itemType, String containerId)
   at SyncInvokeGetDefaultData(Object , Object[] , Object[] )
   at System.ServiceModel.Dispatcher.SyncMethodInvoker.Invoke(Object instance, Object[] inputs, Object[]& outputs)
   at System.ServiceModel.Dispatcher.SyncMethodInvoker.Invoke(Object instance, Object[] inputs, Object[]& outputs)
   at Tridion.ContentManager.CoreService.CoreServiceInvoker.Invoke(Object instance, Object[] inputs, Object[]& outputs)
   at System.ServiceModel.Dispatcher.DispatchOperationRuntime.InvokeBegin(MessageRpc& rpc)
   at System.ServiceModel.Dispatcher.ImmutableDispatchRuntime.ProcessMessage5(MessageRpc& rpc)
   at System.ServiceModel.Dispatcher.ImmutableDispatchRuntime.ProcessMessage11(MessageRpc& rpc)
   at System.ServiceModel.Dispatcher.MessageRpc.Process(Boolean isOperationContextSet)

On First Transaction:

I was creating components using WCF service in my application,few times it was showing below error while creating/updating the Multimedia component.

The requested service, 'http://testservicexyz.com/webservices/CoreService2011.svc/streamUpload_basicHttp' could not be activated. See the server's diagnostic trace logs for more information.

Once I got such error for a multimedia component,there after for every multimedia while Creation/updating the components through core service in WCF getting below error

A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: Named Pipes Provider, error: 40 - Could not open a connection to SQL Server) The network path was not found

Below is my WCF service Config details

<binding name="streamDownload_basicHttp" closeTimeout="00:05:00"
          openTimeout="00:10:00" receiveTimeout="00:10:00" sendTimeout="00:01:00"
          allowCookies="false" bypassProxyOnLocal="false" hostNameComparisonMode="StrongWildcard"
          maxBufferPoolSize="1073741824" maxBufferSize="1073741824" maxReceivedMessageSize="1073741824"
          textEncoding="utf-8" transferMode="Buffered" useDefaultWebProxy="true"
          messageEncoding="Mtom">
          <readerQuotas maxDepth="32" maxStringContentLength="15000001"
            maxArrayLength="16384" maxBytesPerRead="4096" maxNameTableCharCount="16384" />
          <security mode="TransportCredentialOnly">
            <transport clientCredentialType="Basic" proxyCredentialType="None"
              realm="" />
            <message clientCredentialType="UserName" algorithmSuite="Default" />
          </security>
        </binding>

Whenever I tried on second transaction it was working as expected,multimedia components are created/updated successfully without any error.

On First Transaction:

I was creating Components using WCF service in my application, few times it was showing below error while creating/updating the Multimedia Component.

The requested service, 'http://testservicexyz.com/webservices/CoreService2011.svc/streamUpload_basicHttp' could not be activated. See the server's diagnostic trace logs for more information.

Once I got such error for a multimedia Component, there after for every multimedia while Creation/updating the Components through core service in WCF getting below error

A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: Named Pipes Provider, error: 40 - Could not open a connection to SQL Server) The network path was not found

Below is my WCF service Config details

<binding name="streamDownload_basicHttp" closeTimeout="00:05:00"
          openTimeout="00:10:00" receiveTimeout="00:10:00" sendTimeout="00:01:00"
          allowCookies="false" bypassProxyOnLocal="false" hostNameComparisonMode="StrongWildcard"
          maxBufferPoolSize="1073741824" maxBufferSize="1073741824" maxReceivedMessageSize="1073741824"
          textEncoding="utf-8" transferMode="Buffered" useDefaultWebProxy="true"
          messageEncoding="Mtom">
          <readerQuotas maxDepth="32" maxStringContentLength="15000001"
            maxArrayLength="16384" maxBytesPerRead="4096" maxNameTableCharCount="16384" />
          <security mode="TransportCredentialOnly">
            <transport clientCredentialType="Basic" proxyCredentialType="None"
              realm="" />
            <message clientCredentialType="UserName" algorithmSuite="Default" />
          </security>
        </binding>

Whenever I tried on second transaction it was working as expected, multimedia Components are created/updated successfully without any error.