SQL Server 2008 – Database Mirroring with TDE

I have the requirement of mirroring a few databases and also using transparent data encryption (TDE) on them as our data must be encrypted while 'at rest'.

I have setup TDE on both the principal and the mirror. The problem I have comes into play when I am setting up the mirroring of the two databases. Since I am using TDE I don't know of a way to setup mirroring via the gui, so I am forced to use t-sql to get the job done.

Below is the code I have used on the mirrored server

--Restore the full backup to the mirrored mdf and ldf
OPEN MASTER KEY DECRYPTION BY PASSWORD = '1Password'
RESTORE DATABASE TDE
   FROM disk = '\\SERVERNAME\SQL_Stuff\Backup\TDE_FULL.bak'
      WITH NORECOVERY,
       REPLACE,
       MOVE 'TDE' TO 'E:\TDE.mdf',
      REPLACE,
      MOVE 'TDE_log' TO 'G:\TDE.ldf'
CLOSE MASTER KEY 
GO

--Restore the log backup to the mirrored db
OPEN MASTER KEY DECRYPTION BY PASSWORD = '1Password'
RESTORE LOG TDE
    FROM DISK = '\\SERVERNAME\SQL_Stuff\Backup\TDE_LOG.trn'
    WITH NORECOVERY;
CLOSE MASTER KEY
GO


--Drop/Create Mirroring endpoint on mirror
--DROP ENDPOINT TDE
CREATE ENDPOINT TDE
    STATE = STARTED
    AS TCP ( LISTENER_PORT = 7025 )
    FOR DATABASE_MIRRORING (
        ROLE = PARTNER
        );
GO

--Check the endpoints for the mirror
USE MASTER
SELECT * FROM sys.database_mirroring_endpoints
GO

--Set the principal on the mirrored db
OPEN MASTER KEY DECRYPTION BY PASSWORD = '1Password'
ALTER DATABASE TDE SET PARTNER = 'TCP://PRINCIPAL.DOMAIN.local:7022'
GO
CLOSE MASTER KEY
GO

Below is the code that I use on the principal server.

----------------------Mirroring Section----------------------------------

--Full Backup of Principal
USE TDE
GO
BACKUP DATABASE TDE
TO DISK = '\\SERVERNAME\SQL_Stuff\Backup\TDE_FULL.bak'
    WITH COMPRESSION,
         NAME = 'Full Backup of TDE';
GO

---Log Backup of Principal
USE TDE
GO
BACKUP LOG TDE
TO DISK = '\\SERVERNAME\SQL_Stuff\Backup\TDE_LOG.trn'
    WITH COMPRESSION,
         NAME = 'Log backup of TDE'
GO

--Drop/Create Mirroring endpoint on principal
--DROP ENDPOINT TDE
CREATE ENDPOINT TDE
    STATE = STARTED
    AS TCP ( LISTENER_PORT = 7022 )
    FOR DATABASE_MIRRORING (
        ROLE = PARTNER
        );
GO

--Check the endpoints for the princple
USE master
select * from sys.database_mirroring_endpoints
GO

--Set the mirror db on the principal db
OPEN MASTER KEY DECRYPTION BY PASSWORD = '1Password'
ALTER DATABASE TDE SET PARTNER = 'TCP://MIRROR.DOMAIN.local:7025'
CLOSE MASTER KEY
GO

I setup the mirroring endpoint 1st, then the principal endpoint. I then issue the ALTER DATABASEon the mirror, then on the principal, where I get the resulting error:

 Msg 1416, Level 16, State 31, Line 2
Database "TDE" is not configured for database mirroring.

I am at a loss as to what to do about this. The mirror is in the "restoring" state, but I am certain that the error is talking about the principal db.

Thanks for any help you can give!

Update
Code for the Principal TDE:

--Create Master Key in Master Database
USE MASTER
GO
CREATE MASTER KEY ENCRYPTION BY PASSWORD = '1Password';
PRINT 'created master key'
go

--Backing up the master key file
USE master;
OPEN MASTER KEY DECRYPTION BY PASSWORD = '1Password';
BACKUP MASTER KEY TO FILE = '\\SERVERNAME\TDE_Master_Key.key' ENCRYPTION BY PASSWORD = '1Password';
GO

--Create Server Certificate in the Master Database encrypted with master key (created above) which would be used to create USER database encryption key.
USE Master
CREATE CERTIFICATE Cert_For_TDE WITH SUBJECT = 'Master_Cert_for_TDE', EXPIRY_DATE = '3500-Jan-01';
Go

--Backing up the server cert file
--USE master;
BACKUP CERTIFICATE Cert_For_TDE TO FILE = '\\SERVERNAME\TDE_Cert.cer' 
    WITH PRIVATE KEY ( FILE = '\\SERVERNAME\TDE_Cert_Key.key', ENCRYPTION BY PASSWORD = '1Password');
GO

--Create user database key
USE TDE
CREATE DATABASE ENCRYPTION KEY
WITH ALGORITHM = AES_256 ENCRYPTION BY SERVER CERTIFICATE Cert_For_TDE;
GO

--Enabling Transparent Database Encryption for the USER Database
USE master;
GO
ALTER DATABASE TDE SET ENCRYPTION ON
GO

Code on mirror for TDE:

--restore the backed up key to the mirror
use master
RESTORE MASTER KEY
    FROM FILE = '\\SERVERNAME\TDE_Master_Key.key'
    DECRYPTION BY PASSWORD = '1Password'
    ENCRYPTION BY PASSWORD = '1Password';
GO

--restore the backed up cert to the mirror
USE Master;
OPEN MASTER KEY DECRYPTION BY PASSWORD = '1Password'
CREATE CERTIFICATE Cert_For_TDE    
FROM FILE = '\\SERVERNAME\TDE_Cert.cer' WITH PRIVATE KEY ( FILE = '\\SERVERNAME\TDE_Cert_Key.key', DECRYPTION BY PASSWORD = '1Password');
GO

Update2
sys.database_mirroring_endpoints joined with sys.tcp_endpoints on Principal show:

endpoint_id name    principal_id    state_desc  role_desc   connection_auth_desc    certificate_id  encryption_algorithm_desc   port    ip_address
65545   TDE 261 STARTED PARTNER NEGOTIATE   0   RC4 7022    NULL

sys.database_mirroring_endpoints joined with sys.tcp_endpoints on Mirror show:

endpoint_id name    principal_id    state_desc  role_desc   connection_auth_desc    certificate_id  encryption_algorithm_desc   port    ip_address
65537   TDE 261 STARTED PARTNER NEGOTIATE   0   RC4 7025    NULL