Symptoms

In Dev, I am able to add a SharePoint Content service object / SmartObject (2010), using the "ServiceAccount" authentication method. In Test, I get an error.

Url: https://portal.denallix.com/
Username: Blank]

Error Details: The remote server returned an error: (500) Internal Server Error.","anonymous","0.0.0.0","dlx:D:Program Files (x86)K2 blackpearlHost ServerBin","44665478","f6874532963a437da27c7d2879a62e76",""
"44665524","2016-02-29 14:40:20","Error","SmartObjects","10702","Error","SourceCode.SmartObjects.ServiceBroker RefreshServiceInstance]","10702 An error occurred in the Service Instance. Failed to initialize the Context:
Url: https://portal.denallix.com/
Username: Blank]
 

Diagnoses

The "The remote server returned an error: (500) Internal Server Error." error is usually a response from the Sharepoint server when K2 request something from Sharepoint (usually through K2 and/or non-web service in Sharepoint).

A '500' error usually indicate that it is perhaps an "internal" error that was not handled by the server's web service response (possibly) and as such usually does not contain much details when compared to perhaps a '401' which is usually permission related or '404' which is usually not being able to access a file/resource. As such, perhaps the repeated "There is not enough space on the disk." response that is being logged may be of relevance.

1. Another good troubleshooting step is to possibly run Fiddler on the K2 server as the "K2 Service Account", then when attempting to register this service instance choose the "Service Account" Authentication Mode. This should capture the request and response that occurs between K2 and Sharepoint perhaps we can also use this along with any ULS logs to pinpoint the issue.

2. Additional, in Central Administration > Monitoring > "Review problems and solutions", are there any outstanding health issue?
 

Resolution

Additional disk space was added on either SP/SQL server to resolve the issue.