Just recently, a post was made in Microsoft Forums regarding a bug/behavior of Committable Transactions and SqlConnection timeout. The same issue is evident for TransactionScope which was posted in 2006. Good thing there is a fix[more]
I have used TransactionScope a number of times including in one of my previous posts on Unit Testing (integration testing if you're particular about it) DataAccess so will focus on it for now (but as said, same issue with Committable Transaction class).
When you use TransactionScope and set the timeout to a certain value (not sure what is the default is not specified) and the timeout elapsed before the TX is completed, what happens is that actions made before the timeout is rolled back but after that, the connection unbinds itself from the transaction and if any action, places itself in autocommit mode (just like a regular connection) and if actions are made after the timeout (BUT still inside the TransactionScope, since these were performed in autocommit mode, they will not be rolled back).
Trying out the code below (or the downloadable sample project at the bottom) you will notice that in the "BASIC" example (which demonstrates the issue), you try to insert 5 rows, TransactionScope timeout more or less happens after the 2nd row, then after the TransactionScope, you check the database and there are 3 rows committed (instead of NONE).
The good news is that MSFT found this issue too and had a fix for it a little after the release (probably after the System.Transaction or release of .NET 2.0) which involves a new keyword in the connection string : transaction binding defined in MSDN as :
Controls connection association with an enlisted System.Transactions transaction.
Possible values are:
Transaction Binding=Implicit Unbind;
Transaction Binding=Explicit Unbind;
Implicit
Unbind causes the connection to detach from the transaction when it
ends. After detaching, additional requests on the connection are
performed in autocommit mode. The System.Transactions.Transaction.Current
property is not checked when executing requests while the transaction
is active. After the transaction has ended, additional requests are
performed in autocommit mode.
Explicit Unbind causes the connection to remain attached to the transaction until the connection is closed or an explicit SqlConnection.TransactionEnlist(null) is called. An InvalidOperationException is thrown if Transaction.Current is not the enlisted transaction or if the enlisted transaction is not active.
So as you can see, the Implicit Unbind was the default behavior (which exibits the issue when the TX times out) and using explicit unbind will have the connection remain "bound" to the transaction instead of detaching itself and live it's life on it's own (and in on autocommit mode). Effectively, those actions performed after the Transaction Scope times out will also be uncommitted and we have a consistent behavior.
Here's my code while trying to verify the issue on my own (code taken from the forums with a few additions to help illustrate better). NOTE: Don't forget to modify the connection accordingly (as you see fit on your environment). Had this on VS2005, .NET 2.0 and the sample project in a console application.
1 using System;
2 using System.Data.SqlClient;
3 using System.Transactions;
4 using System.Threading;
5
6 class Demo
7 {
8 static string connectionString;
9
10 static void Main(string[] argv)
11 {
12 // ** Change connection strings accordingly
13
14 Console.WriteLine("TransactionScope – BASIC");
15 Console.WriteLine("============================");
16 connectionString = @"server=.sql2005;database=testDB;integrated security=SSPI";
17 TransactionScopeTest();
18
19 Console.WriteLine();
20 Console.WriteLine("TransactionScope – IMPLICIT UNBIND");
21 Console.WriteLine("============================");
22 connectionString = @"server=.sql2005;database=testDB;integrated security=SSPI;transaction binding=implicit Unbind;";
23 TransactionScopeTest();
24
25 Console.WriteLine();
26 Console.WriteLine("TransactionScope – EXPLICIT UNBIND");
27 Console.WriteLine("============================");
28 connectionString = @"server=.sql2005;database=testDB;integrated security=SSPI;transaction binding=explicit Unbind;";
29 TransactionScopeTest();
30
31 Console.ReadKey();
32 }
33
34 private static void TransactionScopeTest()
35 {
36 try
37 {
38 ReCreateTable();
39 Console.WriteLine("Table recreated");
40
41 try
42 {
43 using (TransactionScope tx = new TransactionScope(TransactionScopeOption.RequiresNew, TimeSpan.FromSeconds(2)))
44 {
45 Console.WriteLine("Transaction started lasting 2 seconds");
46 using (SqlConnection con = new SqlConnection(connectionString)) // connection string is set in main method (see examples)
47 {
48 con.Open();
49 Console.WriteLine("Server is {0}", con.ServerVersion);
50 Console.WriteLine("Clr is {0}", Environment.Version);
51
52 for (int i = 0; i < 5; i++)
53 {
54 using (SqlCommand cmd = con.CreateCommand())
55 {
56 cmd.CommandText = "insert into TXTEST values ( " + i + " )";
57 cmd.ExecuteNonQuery();
58 Console.WriteLine("Row inserted");
59 }
60
61 Thread.Sleep(TimeSpan.FromSeconds(1));
62 }
63
64 Console.WriteLine("Committing… now we get the timeout (sort of)");
65
66 tx.Complete();
67 }
68 }
69 }
70
71 catch (Exception e)
72 {
73 Console.WriteLine(e.Message);
74 }
75
76 Console.WriteLine("Table contains {0} rows!!!", CountTable());
77 DropTable();
78 }
79
80 catch (Exception e)
81 {
82 Console.WriteLine("Unexpected error:");
83 Console.WriteLine(e.ToString());
84 }
85 }
86
87 static void ReCreateTable()
88 {
89 try
90 {
91 DropTable();
92 }
93
94 catch (Exception) { }
95
96 using (SqlConnection con = new SqlConnection(connectionString)) // connection string is set in main method (see examples)
97 {
98 con.Open();
99 using (SqlCommand cmd = new SqlCommand("create table TXTEST ( F1 int )", con))
100 cmd.ExecuteNonQuery();
101 }
102 }
103
104 static int CountTable()
105 {
106 using (SqlConnection con = new SqlConnection(connectionString)) // connection string is set in main method (see examples)
107 {
108 con.Open();
109 using (SqlCommand cmd = new SqlCommand("select count(*) from TXTEST", con))
110 return (int)cmd.ExecuteScalar();
111 }
112 }
113
114 static void DropTable()
115 {
116 using (SqlConnection con = new SqlConnection(connectionString)) // connection string is set in main method (see examples)
117 {
118 con.Open();
119 using (SqlCommand cmd = new SqlCommand("drop table TXTEST", con))
120 cmd.ExecuteNonQuery();
121 }
122 }
123 }
Download Demo – TransactionTimeoutIssue.zip (5.05 kb)
The sample project also contains another class for illustrating the issue with Committable Transaction. Just exclude the TransactionScope class and uncomment the Main method in CommittableTransactionDemo.cs.
Please feel free to drop me message if I'm missing something. Hope this helps (including me if I do forget about this in the future).
I'm off to the swimming pool. 
More Information:
MSDN – Implementing an Implicit Transaction with TransactionScope