Event viewer error

we are using a Prolient 1600 server running NT 4.0 with SMS 2.0 & SQL 7.0. SMS stopped working-connection failed. I went to the event viewer and found an event detail that says: The COM+ Event System detected a bad return code during its internal processing. HRESULT was 80070005 from line 46 of d:\n4\private\es\tier1\eventsystemobj.cpp.
SMS 2.0 and SQL 7.0 have sp1. When I tried to install sp2 I got an error and could not update. No passwords have been changed and tried an SMS reset with no luck.
any ideas?
Jeff Plank Asst.IT manager