In side by side upgrade, sql server 2000 database never gets upgraded automatically. SQL 2000 Database need to be manually ported to the new verstion.

I think, you viewed the old instance of SQL server 2000 using SQL server Management studio and thought it got upgraded. And then from Enterprise manager you droped the same database :(.

I hope you have the backup. Restore the backup in the new instance you created and then change then compatibility level as mentioned in the document.

Let me know incase of any further query.

Regards

Sachin