After thoroughly troubleshooting the issue he asked me for some input.
He had done everything anyone would do to troubleshoot an issue with a VM Network:
- Made sure the IP address and subnet were correct.
- He double checked the VLAN on the VM host.
- He deleted the virtual NIC and added a new one with a different driver
Event Type: Error
Event Source: IPSEC
Event Category: None
Event ID: 4292
The IPSec driver has entered Block mode. IPSec will discard all inbound and outbound TCP/IP network traffic that is not permitted by boot-time IPSec Policy exemptions.
After some researching I found the following VMWare article. It turns out this is actually not that an uncommon occurrence on VMs running Windows Server 2003.
I followed the given instructions and I disabled the IPSec service - even though it wasn't even running - and rebooted the VM. When the system came back online so was the network.
I hope this might help someone out there!