Thanks for getting in touch. Right now, the best solution is to install a Tentacle on your Octopus Server and use that for running steps. As a side-note we will be shipping a new feature in Octopus 3.3 that will allow you to run scripts directly on the Octopus Server without requiring a Tentacle to be installed.
As to your error, this occurs when there is something wrong with the connection to the SQL Server. Is this error reproducible on your Octopus Server today?