I just completed a fresh install of Windows Server 2000, I updated to service pack 4
and downloaded the Microsoft iSCSI initiator-2.04-build3273-x86fre
There are 3 different versions of the iSCSI initiator-2.04, do you have the correct one installed?
It looks as it depends on the CPU.
I was able to connect and mount to both a file I/O and Block I/O Lun
I also copied files to both lun's.
It looks as you did add the Lun to the target.
Configuration-> iscsi target manager->target volume manager
For the block I/O did you get message to format it first?
I would double check your network, if possible make small network with only the DSS and the win 2000 server with a switch to test.
Also check your NIC's could be a setting somewhere that is blocking you.
Do you have any firewall applications on the Win 2000 server ?