Don't worry, you're still strong!
There's absolutely no comparison at all between free weights and machines -- it's comparing apples and oranges. Don't even try - they are going to be totally different.
You can't even compare weights on different brands of the same machines. In my gym, we have a LifeFitness row machine side-by-side with a Cybex one. I'm 50% stronger on the LifeFitness, even though they look identical and are targeting the same muscles.
I recently went to a lecture about the physics of movement and the take-home lesson was that the weight that you see on a DB or machine has nothing to do with the force being exerted on a muscle. The amount of weight that you're actually lifting is determined by force angles and moment arms and things that I never understood in high school.
As for the numbers on the weight stack, the '2' probably stands for 20 pounds (and it's including all the plates above it), but then some machines are in kilos. And for some, it's just a setting. Just find the right setting that's challenging for you and don't even worry what the 'weight' is. The number is really only useful as a way to gauge your progress when you can move down a hole.