There is no problem having the service stop itself - I just tried with one of my own services, written with Delphi 4 (without using the TService class). The following routine works for me.
You should be able to use WMI (Windows Management Instrumentation) to restart a service, even from within the service itself. Don't know if this would cause any strange problems but it should work. Here's an article on doing WMI with Delphi.
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