Importing a raw virtual machine from either Fusion or Player crashes the VMWare Host Agent in VMWare Server 2.0.2. Surely a more graceful handling of exceptional situations could be implemented. Pretty bad form really.
To get VMWare Server up again just go to services and find the “VMWare Host Agent” which will be stopped. Start it. Once back up and running I was able to create a new virtual machine and use my existing vmxdk. No need for VMWare Converter.