It appears that there is something generally wrong with the server 2 host.
Does it have enough disk space?
Windows has limits on the length of a pathname. Is the installdir too
long, such that the pathnames within the instance dir are then too long?
Is it executing the right version of java? From the DAS host, you
should be able to do ssh server2 java -version and see the right version
of java.
Is sshd and the user account being used for login have sufficient
priviledge to be able to access the filesystem?
For server 1, are you using an SSH node or a CONFIG node? Since the DAS
is running on server 1, the DAS doesn't have to use SSH to create and
start the instances on server1, so if this problem is ultimately related
to SSH, that might explain why you are seeing the issues with server 2
but not with server 1.
Tom