W2KPro Issue – Complete Loss of Desktop

I was asked to look at a W2K machine because nothing was showing up on the screen. At first, I thought that some program on the internet was attempting to connect and the site was not responding. I did all the usual things Ctrl+Alt+Delete, all the safe modes, boot logging, last known…, command prompt, nothing. Finally, IE connected and I attempted to look at the options. IE was working, but when I minimized IE there was nothing on the desk top. Then suddenly, IE disappeared. I think now that the machine has a virus. In Task Manage, exlorer.exe is running. Any suggestions other than re-intalling with the recovery CDs?