I have a Mac Mini with OS X Mountain Lion Server installed. I've turned on Time Machine in the server app and selected an internal disk to backup clients to. On my iMac, I have turned on Time Machine and selected the backup share listed on the server. But, I recieve the following error dialog box:
Time Machine couldn’t complete the backup to “server”. Back disk is not available. I'm clearly able to connect to the server and the Shared Items > Backup folder, which the server created. I'm also made sure file permissions look right.