"The network path was not found” error message when you try to start the Server service on a computer that is running Windows Server 2008 R2

On a computer that is running Windows Server 2008 R2, the Server service may not start. In this scenario, the following event is logged in the System log:

Log Name: System
Source: Service Control Manager
Date: 03/11/2009 13:54:29
Event ID: 7023 Task
Category: None
Level: Error
Description: The Server service terminated with the following error: The network path was not found.

Also, you receive the following error message if you try to manually start the Server service:

This issue occurs because the system path variable (%path%) contains a Universal Naming Convention (UNC) path.

Note To view the system path variable, use the path command.

A system path that contains a UNC path may cause severe system problems and severe software problems. Therefore, a system path that contains a UNC path is unsupported.

To work around this issue, delete the UNC paths from the system path variable. If the UNC paths must be added to the environment variables, use the user path environment variable.