I've recently went back to an old project that was done during the X2 days and I am getting a lot of dropouts. I didn't have this problem back then but now the project is a problem child to do any editing in. Is there any method to find the source of the dropout issue?

Under Preferences > Audio > Sync and Caching, File System, try increasing Playback I/O Buffer Size to 128 or 256.
 
Also, when the dropout Toast notification pops up, click on "Help." It suggests multiple solutions, including more details on the above.

Is X2 still installed?

Yes, I still have all my past versions intact. X1,2,3 even music creator from way back.

If the project plays OK in X2 today but not in a newer version, comparing the X2 configuration to the new version may offer a solution. If the project fails the same in both versions of SONAR, it may point to a something other than SONAR such as a Windows update, an update to a plug-in or change to a program running in the background.