>We had problems with Win2000 Terminal Server and a Win2000 data server.

MS posted error 1104 as a known issue. I was told it was corrected
on the last service pack from MS, but it did not correct this issue.
# http://support.microsoft.com/default.aspx?scid=KB;EN-US;Q299603&

The workaround was to have a dummy user :) logged on first thing in the morning with no idle timeout. That first user keeps the file handles open all day.