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If you are getting that error, uninstall Microsoft Games for Windows Live redistributable and
Microsoft Games for Windows Marketplace then download and install the new Games for Windows Marketplace Client:
http://www.xbox.com/en-US/LIVE/PC/DownloadClient
then run the new Games for Windows Marketplace Client and sign into the account you used to activate Fable III and your paid and free DLCs.
If you activated the free DLCs into your GFWL account, they should be available in the *Game Add-ons* area of Fable III in your account in the Games For Windows Marketplace. You can download them from there and they will be usable in game. :)
For me, I was able to download my Free Weapons, Yule Hat and Tattoo set in the same way I mentioned above. They appeared in game just fine.
I can't say for sure as I didn't have Windows Live ID sign-in assistant installed originally and I still don't have it after installing the new Microsoft Games for Windows Marketplace Client.
I guess that would have to be tried and tested by anyone who has Windows Live ID sign-in assistant installed and see if it gives them a problem.
Obviously the game key is registered to my account else I wouldn't be able to play so....I dunno.
Replace the GFWL Client with the new GFWM Client. Your game, DLC and freebies that were originally activated to your GFWL account will appear in it in the Game Add-ons section of the GFWM Client after you log in.
Its odd. :p
Did you uninstall all GFWL and Marketplace and try downloading and installing the updated GFWM from the link in the post?
I was having the same problem just like you and Pumpkin until I did that and then everything appeared normal for me to download. I think I will try to make a video on it.
But anyway, let me know. I will look further into it. :)
I had Fable 3 installed before reinstalling GFWL. Because of this, it didn't show up in the Marketplace. All I had to do to fix it was go into Fable 3, do the update, and enter the code. It then started downloading (at which point I alt tabbed and opened the Market, then closed Fable 3 because I didn't want to keep it running).
A little messy, but it seemed to work.
Awesome news. I am very happy you got it to work. :D
Interesting. I'll have to try this out! Thanks for the update, man.
I believe online play is still functional. I activated free join and someone joined my game and helped me during a boss battle but it only happened once. :(
The major problem with online play though is that the other person will need to have the same exact DLCs you have in order to join your game which is a bummer. :(