ERROR - The SQL Server might not be started.

[CALMAC25]

My question refers to SharePoint Team Services.
Our Sharepoint Team Services was configured to use a MSDE
database. Due to growth of use and improved security, the
decision was taken to move the Sharepoint database from
the locally installed MSDE to a SQL2000 server.
All seemed to go well with the database migration, but now
when we try to add new items to any sub web we receive the
following error "SQL Server Error. The SQL Server might
not be started. If this problem persists, please contact
your administrator."
This error does not appear when you delete or amend any of
the SharePoint sub web items only when you try to add
something new, like a new contact.
Have tried to revert back to the MSDE configuration and it
now also fails with the above error. It apperars to me
that the problem is Sharepoint related rather than
database, since the restored MSDE DB is also coming up
with the same error.
Only posting on the Microsoft KB is Article - 288536, but
have followed instructions with no change to the error.
Would appreciate any suggestions
Cheers