When ever I've reinstalled my game (when I was using my original DVD version 1.0, or the DVD "Gold Edition" which has version 1.5) I always allowed the game to install the DirectX version that came with the install package. I think my Vista computer has DirectX 10 for the graphics card it has installed, yet I always made sure the game ran its installation of the DirectX 9 files it has on the DVD. Not that I know for sure, but letting the install Wizard add whatever DirectX 9 files that came with the game seemed the right thing to do.
Thanks Pisces for looking into this too....... I think you're right in that there may be some files left over somewhere that are making a conflict.
Funny you should mention the gu.exe file. I originally had the below image in my last post to show the main game folder "Silent Hunter Wolves of the Pacific":
Like you, I was going to mention to Bugs not to use this gu.exe file to open the game. But, I realized Bug's is using an older version of the game and the gu.exe isn't in the older versions of the game. The gu.exe didn't get put into the game until version 1.5.