The problem for me with Win2k was that there was a problem with Userinit.exe not working/there. hence, the reason why I kept getting the logon loop.
booted into the recovery console, took my other Win2k machine and copied the userinit.exe onto a floppy, and then used "copy A:\userinit.exe C:\winnt\system32/userinit.exe" to put that file in its place. I did have some corruption with Windows after, so I ran a repair of Windows, and that was it, Win2k Booted.
Credit for the solution goes to the combined efforts of:
jonno001
metafizx
Thanks guys!!!!
