I don't know W2K that well, but I know that some WinOS, BIOS, driver, reader combinations have problems recognizing large flashdrives.
See if you can get a USB driver update for W2K or try another compatible USB driver.
To narrow it down, have you tried another reader apart from the Lexar?
[These things can be annoying - I bought a pair of C-Media multireaders and both of them bluescreen two separate XP boxen if you put a card in. Tried various drivers to no avail. They work fine in Linux though.....!]
Mac