Sorry, I was mistaken... the correct file location is:
C:\Program Files\K2.net 2003\K2WS\Workspace\web.config
(notice the "Workspace" folder as opposed to "WorkspaceService").
Open this web.config in Notepad and see what value is in the ServerName key (this is the name of the K2 Server). Is this correct? If so, is the K2 server service on the machine stated here started?
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