"why is this all happening only to the Windows Server 2003 machine"?
Because Microsoft tightened down a lot of things in Win2K3 that previous Windows OSes allowed.
I upgraded a server from Win2K to Win2K3 a few weeks ago, and already we've been bit by two of these paranoia changes. I don't yet have any experience that bears directly on your problem; this is just a general observation.
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