It is difficult to say what may cause this issue because you have not provided enough information.

I would say this error occur because of one of the following:
You have not installed the K2.net Sharepoint components on your Sharepoint Server OR you have Sharepoint SP2 installed on your machine and did not run the K2.net hotfix for Sharepoint SP2.

To install these components:
1. Run the K2.net 2003 SP2a installation on your Sharepoint server.
2. Select "Additional components" section from the installation and complete the installation.
3. If you have Sharepoint SP2 installed on your machine, please also remember to install the K2.net hotfix for Sharepoint SP2.

I hope this helps.

Regards,
Barry

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This message indicates that the k2.net server cannot find the K2WorkflowService web service, which is the Collaboration Tools' native web service.

Please confirm that the links in the StringTable of the "SharePoint Workflow Services" project is correct. The relevant entry is:

* DBServicesURL

The value should look something like,

http://<iis_server>/K2V3/K2WorkflowService/DBServices.asmx

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