I was working on a Small Business Server 2003 system at the weekend. My first job of the day was to install the latest security patches then reboot. Unfortunately after the reboot the server had dropped off the network and the IPSec Services service had failed to start. Manually trying to start it resulted in "The system cannot find the file specified". I tried another reboot for good measure but got the same result. I then disabled the service and rebooted. The server stayed on the network but components like Sharepoint and OWA would not work.
My initial suspicion was that this was caused by one of the security patches I had applied so I uninstalled them one at a time trying to find which was the culprit. However, after they all had been removed the issue still persisted. A bit of Googling the event logs showed that the IPSec Services were entering "block mode" and led me to the solution to my problem with this article:
http://support.microsoft.com/?kbid=912023. It seems that there was a corrupted file in the policy store. After resolving the issue I reapplied the security patches without any trouble.