At this point, then, I suspect that you'll need to reboot from the Windows 2000 install CD to perform a repair installation. I was thinking this could be related to an issue I've read about which arises when the 128 bit encryption pack is installed before SP1 without rebooting between the installations. The fix for that was very specific and involved using the Recovery Console to restore Lsasrv.dll, but I think you're going to be better off performing the repair installation.
If the repair installation doesn't work, you may have to resort to performing a parallel installation (installing W2K into a different directory) and booting up in the new installation to perform a hack / workaround OR the use of the l0pht utility or a linux boot diskette or some such. If you perform the parallel installation, that at least will enable you to get access to your data to save it off the hard drive (unless it's encrypted) -- if that happens to be a concern.
I hope that gets you up and running, but, even if it does, that leaves you with a decision still to be made regarding the encryption pack. Let me ask some questions about your methodology.
1. Did you install the encryption pack after SP1 on both occasions when this has failed?
2. Did you use the same installation file? If so, where did it come from?
3. Are the language versions for your operating system, the service pack AND the encryption pack all the same?
It's obvious that whatever it is that's causing this is repeatable. Can you think of any circumstance of installation or operation on this machine that is out of the ordinary?
Regards,
Jim