I had a similar problem a couple of weeks ago and the cause was the license manager on the Terminal Servers had stopped. The admin for the WTS restarted the service and then everything was find again.
One other option could also be the temporary license provided by Windows for your host's hostname may have expired. You could try specifying a different hostname using the -n parameter and see if that works.
From: rick henderson <firstname.lastname@example.org>
To: rdesktop list server <email@example.com>
Date: Sun, 19 Oct 2003 18:26:37 -0500
Subject: [rdesktop-users] ERROR: recv: Connection reset by peer
I am getting this error trying to connect to a 2000 server. I am being authenticated by a 2003 server. Can anyone point us in the right direction?