I've been working on adding in-app purchases and was able to create and test in-app purchases using Store Kit (yay!). During testing, I exercised my app in a way which caused the app to crash mid purchase (so I guess the normal cycle of receiving paymentQueue:updatedTransactions and calling finishTransaction was interrupted).
Now I am unable to successfully complete any transactions and instead am getting only transactions with transactionState SKPaymentTransactionStateFailed when paymentQueue:updatedTransactions is called.
The transaction.error.code is -1003 and the transaction.error.localizedDescription is "Cannot connect to iTunes Store"!
I have tried removing all products from iTunesConnect, and rebuilt them using different identifiers but that did not help. I have also tried using the App Store app to really connect to the real App Store and download some apps so I do have connectivity. Finally, I have visited the Settings:Store app to make sure I am signed out of my normal app store account.
I had a similar situation and dumped the iPhone's network traffic to see what's going on. I found that the normal store was contacted instead of the sandbox. It helped to delete the app from the device, make clean and build/install it again. Apparently something with the development profile had gone wrong.
Update: To dump the network traffic of a non-jailbroken iPhone, just use Internet Sharing on your Mac and configure your iPhone to use your Mac's WiFi. Then tcpdump -n -i en1
on your Mac will do the trick.