Usually the SQL server service instance can be recreated and the Smartobject should continue to work, as long as the Guid for the recreated ServiceIntance is the same and the configuration for the service instance is the same.

To check what the service instance guid previously was, you can right click on the smartobject in the Smartobject service tester tool > View XML.  Then perhaps copy that XML to a text editor and search for "serviceinstance", you should find something that looks like:

<serviceinstances><serviceinstance name="AdventureWorks2012" guid="a4a25457-8623-4fdc-b607-f0dc1eee3b75" type="SourceCode.SmartObjects.Services.SQL.SqlServerService" execblock="0">

with the guid for the previous service instance; use that guid when you recreate the service instance.

Additionally depending on how the previous SQL service instance was configured, you will need to configured it similarly with regards to "Authentication Mode"; such that the same service objects (that the smartobject depends on) will be available when you expand the SQL service instance.

If you know te guid that the database was registered witht hen, its should be no problem. You jsut register witht he same guid. If you dont know then, you should be able to edit the smartobject in k2 designer and then remap the methods and fields. This should be simple enough.

Hope that helps