Answer
$K = 2.7~J$
Work Step by Step
The decrease in gravitational potential energy is equal in magnitude to the sum of the elastic potential energy in the spring and the kinetic energy of the two blocks.
We can find the combined kinetic energy of the two blocks:
$K+\frac{1}{2}kx^2 = 2Mgh$
$K = 2Mgh-\frac{1}{2}kx^2$
$K = (2)(2.0~kg)(9.8~m/s^2)(0.090~m)-\frac{1}{2}(200~N/m)(0.090~m)^2$
$K = 2.7~J$
