Ok the problem here is that Partition Magic has just screw up your Extended partitions.
1) Get another Harddrive, and Copy your C:\ Partition to the other harddrive.
2)Copy all the stufff that you have in the Type 85 of windows to the other harddrive so, you are making the backup of all the stuff that you have under windows. Once you have made the backup of all your stuff from the Harddrive 1 to the HD2. Let's work on the First one.
3) To have your windows 2k Working with dual boot, you need a C:\ partition in FAT16 for windows to boot, and lilo to regconize that stuff. Use Partition magic if you wish but use the emergency disk. (If you are using PQMagic 5.0 under W2k You have to apply the patch before use it)
4) Made the partitions in this way:
This are primary partitions
100 MB FAT 16 for windows to boot
15 MB EXT2 for Linux to Boot (has to be inside the 1024 cylinder rule -- Before the 2Gig Limit)
Made an extended partition of the rest of the space, inside the extended made this:
A partition of NTFS or FAT 32 of the Size that you want for windows
Swap partiton for linux
Root partition for linux
The bad news here is that I think you have to reinstall windows 2k. You need have windows 2k installed first before windows.
When you are installing lilo, do not install it in the MBR, install it in the /boot partition for the dual boot.
I hope this would help you.