Thanks Deep Six.... Yes i did a install, no format, just a reapair install then i went to safe mode and cleaned the drivers. I saw some files that were cleaned that were not cleaned before. some with a * in their name. Reinstalled drivers and they passed the windows logo.
Still getting the loop and freeze. no directx install. registry problem maybe.
dxdiag tells me that all directplay8 service providers registry entries are missing or damaged.
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