Terminal Services Problem

We have two Win2k boxes running Terminal Services with another box acting as DC running AD and TS Licensing. This has been running great for a couple years. Now we are getting the following error for new pc’s running XP PRo:

“The remote computer disconnected the session because of an error in the licensing protocol”.

I have reinstalled the licensing server and the CALs (we had for 98 machines now they are used for XP Home) and still get the error.

Another issue is when I log into the DC and launch the TS Licensing console, windows can’t find a TS Licensing server. But I can connect to the server manually and it shows the licenses.

Need help as users can’t get on now!!!!