I am running XP SP2 with XP's firewall turned off running NIS 2004.

This was the post I was looking for:

have you set up a "rule" in your firewall to allow any computer access (inbound and outbound) to port 6346?

Although, in your original posting, you said that you have set up LW to access the required port I believe inbound queries come in via this port as well. So you may have to tell NPF 2004 (the firewall portion of NIS 2004) to allow inbound and outbound connections as well. You will find instructions on how to do this on the Symantec Website.