This was working fine but after an unexpected reboot.
In Explorer, on the Windows 2008 server itself, I can see the shared folders when I do this: \\localhost (or \\servername or \\192.168.1.7) But when I try to click on any of the folders (like \\localhost\folder1), I get 0x80070035 or 0x80070043 "The network path was not found".
What's wrong here?
A couple of reboots fixed the problem. I still don't know what went wrong. :-(
My issue was fixed by opening an administrative cmd session and issuing the netsh winsock reset and then restarting the server.