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Do you have HTTPS enabled on your CDP? If your CDP is using HTTPS and you have the Connections window in Studio set to use HTTP (or vice versa) you will see an error.
Also, what version of BAO Platform do you have installed? Development Studio will only function with a grid on the same version and service pack, so if your grid is 7.6.02 SP6 you cannot use Studio 7.7 or 7.6.02 SP5.