This morning I tried to remove Exchange 2003 on a server due to be decommissioned. During the removal I received a prompt for the installation media, and after I pointed it to my Exchange disk I received this error: "Setup failed while installing sub-component of Windows Active Directory schema update with error code 0xc1037986". It then asked to reboot, so I said yes. After a reboot, none of the Exchange services will start. I've noticed these in the event log: Exchange Server component Microsoft Exchange Messaging and Collaboration Services failed. Error: 0x8000ffff - An unexpected error occurred. Exchange Server component Microsoft Exchange Forest Preparation failed. Error: 0xc1037986 - Cannot find the file. EventType exchangesetuperror, P1 6_5_6944_0, P2 remove, P3 microsoft exchange forest preparation, P4 install, P5 c1037986, P6 _null_, P7 1, P8 NIL, P9 NIL, P10 NIL. Exchange Server component Microsoft Exchange System Management Tools failed. Error: 0xe0070101 - An unknown error has occurred. EventType exchangesetuperror, P1 6_5_6944_0, P2 remove, P3 microsoft exchange system management tools, P4 install, P5 e0070101, P6 _null_, P7 1, P8 NIL, P9 NIL, P10 NIL. I thought I would reapply SP2 and try the removal again, but SP2 will not install because I can't start the Exchange services. The error I am receiving matches up with "Microsoft Exchange Forest Preparation failed". Why would it be trying to run forestprep? Is there a course of action for this server now - it's in a very bad way!

Please verify if you are using the right installation CD, wrong installation file will cause such symptom (Similar issue) Further resources: How to remove Exchange Server 2003 from your computer

Thanks - I had already fixed by using the original installation CD.