Resetting IIS helped.
But i am still not sure what caused this error.
An no idea what to do when if this again comes up.
There were few other solutions found while googling
#1 Sharepoint Server Account password: Revert if somebody changed the passoword
#2You can try to copy OWSSVR.DLL file from another WFE server to the production server. (Backup the OWSSVR.DLL before copying)
Location of the OWSSVR.DLL: c:\program files\common files\MicrosoftShared\Web server Extensions\12\ISAPI\ and looked for owssvr.dll