Wow this is a heavy problem!
Am having the same issue on my developing machine. Few days ago it was working fine, and now my projects do not work. Today I upgraded to 7.6 with same results.
Since even the compiled executables fail, it must be not something on the editor, but rather I suppose a directX upgrade related problem.
In fact the editor works and compiles fine.
I use win7 ultimate, x32.
HOWEVER... in my secondary test machine, the compiled programs work just fine. It has xp sp3, and the last directx update I did was the june 2010 redist from MS. I tried it on my w7 computer without success.
So, my conclusion is that some very recent directX file is incompatible.
TGC, please help us by providing some debug tool in order to find the problem in more detail.
May the 3d force B with U