If voltage across RE is 0.6V or higher, then current flows into the bias leg of Q2. If this happens then it causes Q1 to conduct a little more, pulling output V downward a bit.
Your schematic appears to label Q2 collector current 2mA. I don't believe this has any influence on Q1 VO.
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Edited to add: I notice you calculated a small bias current going to Q2. This allows you to assume that voltage on RE is 0.6V (or maybe .4 or .5V). Then calculate current through RE. This should allow you to calculate backward, then eventually find VO.