I have rebooted both the application server and the SQL server, netiher to any avail.
When I run the following queries to find out what and who are using the 'model' database, all that's out there is a sleeping process waiting for input. I have even killed this SPID, but it makes no difference.
SELECT request_session_id FROM sys.dm_tran_locks
WHERE resource_database_id = DB_ID('Model')
exec sp_who SPID