DNS broken in SBS 2008

This site runs SBS server 2008 std. I have just received a call from the clients stating that cannot send mail (it remains in their outbox). I have connected to the server & checked that all services with automatic startup type are running. I ran dcdiag & received an error...

dcdiag
Directory Server Diagnosis
Performing initial setup:
   Trying to find home server...
   Home Server = SRV01
   Ldap search capabality attribute search failed on server SRV01, return value
   = 81

This is ipconfig /all

Windows IP Configuration

   Host Name . . . . . . . . . . . . : SRV01
   Primary Dns Suffix  . . . . . . . : construction.local
   Node Type . . . . . . . . . . . . : Hybrid
   IP Routing Enabled. . . . . . . . : No
   WINS Proxy Enabled. . . . . . . . : No
   DNS Suffix Search List. . . . . . : construction.local

Ethernet adapter Local Area Connection:

   Connection-specific DNS Suffix  . :
   Description . . . . . . . . . . . : Intel(R) PRO/1000 EB Network Connection with I/O Acceleration
   Physical Address. . . . . . . . . : 00-15-17-83-38-BC
   DHCP Enabled. . . . . . . . . . . : No
   Autoconfiguration Enabled . . . . : Yes
   Link-local IPv6 Address . . . . . : fe80::d306:ca93:496a:1747%10(Preferred)
   Link-local IPv6 Address . . . . . : fe80::e1c3:3ae5:7d70:c07c%10(Preferred)
   IPv4 Address. . . . . . . . . . . : 192.168.16.2(Preferred)
   Subnet Mask . . . . . . . . . . . : 255.255.255.0
   Default Gateway . . . . . . . . . : 192.168.16.254
   DNS Servers . . . . . . . . . . . : fe80::d306:ca93:496a:1747%10
                                       192.168.16.2
   NetBIOS over Tcpip. . . . . . . . : Enabled

Tunnel adapter Local Area Connection* 8:

   Media State . . . . . . . . . . . : Media disconnected
   Connection-specific DNS Suffix  . :
   Description . . . . . . . . . . . : isatap.{FE7B37A5-1BD3-4546-B2F5-D850BBA05AED}
   Physical Address. . . . . . . . . : 00-00-00-00-00-00-00-E0
   DHCP Enabled. . . . . . . . . . . : No
   Autoconfiguration Enabled . . . . : Yes

I have then begun looking through the DNS forward lookup zones & discovered that the A record under construction.local is showing the wrong IP address. Instead of 192.168.16.2 it is showing 192.168.1.2. I have tried to change the record but received the error ...
The record cannot be updated. The server is unavailable.
I then stopped the DNS service & tried to edit the record with the same error.
I then started the DNS service again & now I cannot access DNS under DNS manager. It just shows the server name with the red circle over it & a white cross through it.
All of the services are still showing that they are started??
This is what the DNS event log now reads...

Log Name:      DNS Server
Source:        Microsoft-Windows-DNS-Server-Service
Date:          19/08/2009 1:54:28 PM
Event ID:      4015
Task Category: None
Level:         Error
Keywords:      Classic
User:          N/A
Computer:      SRV01.construction.local
Description:
The DNS server has encountered a critical error from the Active Directory. Check that the Active Directory is functioning properly. The extended error debug information (which may be empty) is "". The event data contains the error.
Event Xml:
<Event xmlns="http://schemas.microsoft.com/win/2004/08/events/event">
  <System>
    <Provider Name="Microsoft-Windows-DNS-Server-Service" Guid="{71A551F5-C893-4849-886B-B5EC8502641E}" EventSourceName="DNS" />
    <EventID Qualifiers="49152">4015</EventID>
    <Version>0</Version>
    <Level>2</Level>
    <Task>0</Task>
    <Opcode>0</Opcode>
    <Keywords>0x80000000000000</Keywords>
    <TimeCreated SystemTime="2009-08-19T04:24:28.000Z" />
    <EventRecordID>150</EventRecordID>
    <Correlation />
    <Execution ProcessID="0" ThreadID="0" />
    <Channel>DNS Server</Channel>
    <Computer>SRV01.construction.local</Computer>
    <Security />
  </System>
  <EventData Name="DNS_EVENT_DS_INTERFACE_ERROR">
    <Data Name="param1">
    </Data>
    <Binary>51000000</Binary>
  </EventData>
</Event>

Can I reinstall DNS in SBS 2008??