SUCCESS! I fixed the problem.
Using regedit I searched for my mapped XP drive, \drive name, and deleted the 4 registry entries found after exporting them just in case.
Rebooted the PC and all is well, File Explorer works and the XP drive is gone.
Re-mapped the XP drive and I can now get to it without problems and all works as it should.
My best guess is some update screwed things up because the drive was mapped and connected when the update installed.
Version 2004 STILL has problems. Please fix it Microsoft if you follow your users problems.
What was the exact keys you modified and is the fix still working?
Yes, it's still working for me.
Computer\HKEY_CURRENT_USER\Network\Z or your drive letter, I deleted Z.
Computer\HKEY_CURRENT_USER\SOFTWARE\Microsoft\Windows\CurrentVersion\Explorer\Map Network Drive MRU and delete the entry, (a, b, etc), for your drive.
Then add the following after remapping your drive or else it will fail to connect after a reboot or shutdown.
[HKEY_CURRENT_USER\Network\Z]
"ProviderFlags"=dword:00000001