Appears that an admin user installed some russian poker and casino software and this was cause of problem
These programs have been removed, registry checked, malware scans etc run; TS port had been changed from 3389 but even with this fixed unable to connect to it, even from itself to localhost
Terminal Services have been removed and reinstalled, server taken out of domain and rejoined
NETSTAT -A shows it ms-wbt-server listening
Malware must have changed a setting somewhere, but after few days we cant find what
Even imported terminal services part of registry from another working 2003 server
Any suggestions most welcome, as really want to avoid a wipe and reinstall of OS