Cancel K2 Workflow from within custom Server Event code

When you say 'Cancel Workflow' do you mean you want to prevent the rest of the workflow activities from executing?  If that is the case, I think there are several different things you could do in a server code event: 

• 
  
• You could set an outcome for the activity that has a line rule to an activity with no outcomes 
  
• You could goto an activity that has no outcomes

         K2.GotoActivity("Activity Name");

• 
  
• You could expire the current activity if it is not in a parallel path

        K2.ExpireActivity(K2.ActivityInstanceDestination.Activity.Name);

There are even a couple more actions under the SourceCode.Workflow.Management API, but I think I'd try one of the above first.