Imaging the system drive in a Windows Home Server installation is unsupported and often does not work as expected. If you have not installed the most recent update to WHS, then there is a utility, LZReallocator (search in the forums), which can force files off of D:, as long as there is room on the other drives in your storage pool for the files. Remember, though, that duplication requires that files be on two separate drives. If one copy is on the system drive, and the other copy is on the only drive with space for it, then WHS will not move the first copy off the system drive.
Honestly my advice would be to leave your server as is, and buy a new drive for the other computer. Disk space is very cheap these days.
I'm not on the WHS team, I just post a lot. :)