Virtual Server not responding to commands

I have a Virtual Server set up with Terminal Server running inside of it. Initially when I tried logging in I was getting "the parameter is incorrect" error. After some research I did an IISreset and that error went away.
Now when I try to start any machine I get the follow errors:
Webpage error details

User Agent: Mozilla/4.0 (compatible; MSIE 8.0; Windows NT 5.2; Trident/4.0; .NET CLR 1.1.4322; .NET CLR 2.0.50727; .NET CLR 3.0.04506.30; .NET CLR 3.0.4506.2152; .NET CLR 3.5.30729)
Timestamp: Thu, 17 Dec 2009 17:30:00 UTC


Message: 'document.getElementById(...)' is null or not an object
Line: 4
Char: 1
Code: 0
URI: http://127.0.0.1:1024/VirtualServer/VSWebApp.exe?view=1


Message: 'document.getElementById(...)' is null or not an object
Line: 4
Char: 1
Code: 0
URI: http://127.0.0.1:1024/VirtualServer/VSWebApp.exe?view=1


Message: 'document.getElementById(...)' is null or not an object
Line: 4
Char: 1
Code: 0
URI: http://127.0.0.1:1024/VirtualServer/VSWebApp.exe?view=1

I have tried it from the console (using RDP) and from my local machine using IE and Firefox (which has never worked with Virtual Server). This is not a domain controller, the only other use is the tech team stores files on it so we can access them as needed.
The main machine I need up was rebooted in a saved state. I have tried creating two new machines to boot up so I can bring up the machine in the saved state. The new machines will not respond either.
The Event log is clean as a whistle, I think IIS is the issue but by no means am I an IIS guru. The computer is running Windows 2003 R2 completely up to date with windows patches.
To add one more parameter iif I try to get to the server on the console I con not do it using FQDN. I have to use localhost or 127.0.0.1. Otherwise I still get the parameter is incorrect.
Any ideas?