Need emergency help

Folks, I need major help in a hurry. For some reason, an existing installation of WordPress that used to work fine now has a major problem. When a user successfully logs in, WordPress tries to redirect with an address that includes ASCII code for slashes, like this:

wp-login.php?redirect_to=%2Fnews%2Fwp-admin%2F

This should read:

wp-login.php?redirect_to=/news/wp-admin/

This confuses the browser, which redirects the user back to the login page – making it seem as though there’s an incorrect login.

I tried reloaded the previous version of WordPress that I had (1.something), and then completely uninstalled it and tried to fix it by installing WP 2.0. Didn’t help; still getting the same problem.

I am absolutely heartsick over this – I’ve sold this non-profit on the idea that this free software would help them, and now their site is DOWN until I get this fixed.

PLEASE HELP.