I have three windows 2003 production servers, R1 & B1 & D1. I restored R1 from an image as a disaster recovery test. Once it was restored, I believe it was left plugged on to the production network. I then renamed the restored server from R1 to testdomain.

So now when I go in AD on B1 (production server), under Domains Controllers I see B1, D1 and testdomain! So AD thinks I renamed production R1 to testdomain.

How do I go about transferring all the FSMO roles? I tried demoting but it asks for domain credential, when I enter them it says "the specified domain is invalid or does not exit". Netlogon service is also not running on the testdomain. It comes up with the following error. "Could not start the Net Logon service on Local Computer. Error 0xc0000064: 0x0000064.

I need this fixed ASAP, Please help!!

Its unwise to rename a domain controller
but if you do then you should run dcpromo I think
This deals with the issue here but I think it would have been better to demote
the server to a member server and then promote it back to a DC
http://technet.microsoft.com/en-us/library/cc782761.aspx
This may go some way to addressing your problems but IMHO
I think you should now entirely demote the server and repromote it
then demote your clients back to non AD clients and re-enrol them into the newly promoted server