Setup stops after reformatting my system/boot partition which was a dynamic disk?

You will need a parallel installation of Windows 2000 or move the disk into an existing system

Start Dskprobe.exe.

On the Drives menu, click Physical Drive, and then double-click the physical drive that represents the system/boot drive.

Click to clear the Read Only check box, click Set Active, and then click OK.

On the Sectors menu, click Read using the default settings.

On the Drives menu, click Volume Information, and then note the following values:
-Sectors / Track
-Tracks / Cylinder 

Using Calculator (Calc.exe), convert the values you noted from decimal to hexadecimal. Note those hexadecimal values for later use. For example:
Sectors / Track of 63 decimal converts to 3F hexadecimal.
Tracks / Cylinder of 255 decimal converts to FF hexadecimal. 

On the View menu, click Partition Table.

Locate the active partition (the Boot Indicator field lists "SYSTEM") by double-clicking each partition table index entry. Note the Relative Sector number for the active (SYSTEM) partition.

Click the Go button next to the Relative Sector number for the active partition.

On the View menu, click Bytes. This displays the BPB information in hexadecimal.

Change the value at offset 0x018 from 01 hexadecimal to equal the Sectors / Track value in hexadecimal that you noted in step 7.

Change the value at offset 0x01A from 01 hexadecimal to equal the Tracks / Cylinder value in hexadecimal that you noted in step 7.

After you verify that both BPB entries equal the correct hexadecimal values, click Write on the Sectors menu.

Verify that you are writing to the same sector that you recorded for the Relative Sectors setting, and then click Write It.

Quit the Dskprobe.exe tool and boot into the original setup installation

Again you need a parallel installation

Start Dskprobe.exe.

On the Drives menu, click Physical Drive, and then double-click the physical drive that represents the system/boot drive.

Click to clear the Read Only check box, click Set Active, and then click OK.

On the Sectors menu, click Read using the default settings.

On the Drives menu, click Volume Information, and then note the following values
-Sectors / Track
-Tracks / Cylinder 

On the View menu, click Partition Table.

Locate the active partition (the Boot Indicator field lists "SYSTEM") by double-clicking each partition table index entry. Note the Relative Sector number for the active (SYSTEM) partition.

Click the Go button next to the Relative Sector number for the active partition.

Based on the file system type (FAT or NTFS), click FAT Boot Sector or NTFS Boot Sector on the View menu. This displays the BPB information for editing.

Change the Sectors Per Track entry from 1 to equal the Sectors / Track value that you noted in step 6.

Change the Heads entry from 1 to equal the Tracks / Cylinder value that you noted in step 6.

After you verify that both BPB entries equal the correct values, click Write on the Sectors menu.

Verify that you are writing to the same sector that you recorded for the Relative Sectors setting, and then click Write It. 

Quit the Dskprobe.exe tool and restart the computer with original setup installation