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With all do respect, if you have a legit copy of Windows XP then you should call Microsoft, after all then do should have a solution !!!
Using the Windows XP as a server gain is not a good idea, it was not design to run as a server so you will see problem with it in future eve if you manage to get around your current issue.
Last point, just because you operating system goes into loop that odes not mean you will loose everything in the computer.... you can pull the data off that computer via (software tools, there is more then one way of doing that) and that format and re-install the OS and put the data back on it.
Cheers
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