I finally figured out what the cause of the problem was when I tried to a Win2k repair install. For some unknown reason the Win2k install disk was seeing the current Win2k installation on a different drive letter than where it was originally installed, and Win2k was probably looking for it on the original drive letter when it was trying to load. I've no idea what may have caused this odd behavior. Also it's odd that WinXP stilll recognized correct drive for Win2k already installed while Win98SE recognized original Win2k install on the different drive just as Win2k Setup did. Go figure!
Anyway the problem was finally fixed by first deleting some partitions, then recreating them to get Win2k to see its target partition as the correct drive letter, and finally doing a fresh Win2k install. This fixed all Win2k issues, and all SATA drives are now correctly recognized.
However, WinXP would not boot after that because in multi-boot Windows systems the OSs must be installed from oldest, next to oldest to newest as some may know and others may not know. I then tried a WinXP repair install which would not complete because it asked for the timntr_2k.sys file which couldn't be located. Some google searches revealed that file is part of Acronis, and suggested solution was to install Acronis to get the file which worked for the guy who was seeking it. This is even more strange because Acronis was never installed on the system, and I don't even have the Acronis program. A fresh install of WinXP fixed this problem, and a recent WinXP backup image was restored which resulted in everything back to normal in a short time. It probably wasn't necessary to go into as much detail on the resolution to problems, but maybe it may help someone else who experiences these any of these issues.