trouble removing SBS 2003 from domain

I am having trouble removing SBS 2003 from my existing domain. I started with an old server running Windows SBS 2003 (lets call it server1). It was the main server and did all the AD DS / DNS / Domian control.  I have added two new machines; 1 configured with Exchange 2010 (i removed Exchange 2003 from the SBS machine) on Server 2008 R2 (call it server4). it is configured to run AD DS and DNS/domain control.  The second server is Server 2008 R2 (call it server3) which acts as user data and would liek it to be a 2nd Domain controller.
I am having great difficulty removing the existing SBS 2003 server )(Server1). It appears that although it shows that I have 2 DNS / Domain controller (Server1 & Server4), the old server (Server1) seems to be the only one doing login verification. When I try to remove Server1 (SBS) my domain crashes. When I try to promote Server3 to a AD DS & DNS/Domain it fails.
My goal is to retire the old server (SBS) and reformat / repurpose it. I need to get a clean domain with the other 2 servers running Server 2008 R2. I plan to keep the domain / forest level at 2003. What am I missing here, or did not think of???