Yup corrupt registry entry. Notifyobservers parameter is corrupt. Just go into the registry, delete it (using the following link)
http://www.microsoft.com/technet/prodtechnol/windows2000serv/reskit/w2000Msgs/6205.mspx?mfr=truethen re-add the forwarding DNS server in the DNS MMC after. It sounds like the forwarder you once added is corrupt, or one of them is. Make sure you write down the forwarders first.