Terminal Server License CALs are not being accessed

Hi, I have a member server with Windows Server 2003 that several people need to access through Remote Desktop.  I purchased the terminal service license CALs and followed the Knowledgebase Article 325869 to activate the terminal service licenses.  I first setup this Server 2003 member server as a License Server and then installed the terminal services CALs and everything went through without a problem.  When I access Terminal Server Licensing, the CALs show they are there and ready to go.  However we still get the error message that we have exceeded the connection limit when we try to remote more than the initial two remote connections that are default, so the licenses aren't being seen by Terminal Services.

I read that Terminal Services will try to connect to a Licensing Server on a DC, and the only DC locally to this member server is a Windows 2000 DC.  I've also read that 2003 Licensing is unable to come from a 2000 Licensing Server.  So the Terminal Services on this Member Server is not seeing the Licensing Server on itself.  I read that there is a registry change that needs to be made so the Terminal Server will find the licensing on itself and not a DC, but not sure what the change is.  How can I make this member server see the Licensing Server that is already setup and ready to go on itself?

I have made this question worth 500 points because I have people waiting on me right now.  Thank you very much for any information I can get.

Ryan