We have a defined benefit plan, that pays a special $2,000 death benefit to the beneficiary of a deceased participant. Can we eliminate this death benefit (paid from the assets of the plan) or is this considered a protected benefit? What are the notice requirements if we can eliminate the payment?

I believe you will find that IRS Reg 1.411(d)-4 indicates that death benefits greater than the QPSA minimum are not protected and can be eliminated/reduced. (BTW, disability benefits are also in the "unprotected" category.)
See Federal Register Vol.53, No.132, July 11, 1988.