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EDIT: actually, it does launch, after a 30+ second timeout or something.
Update: No wait. Setting the compatibility to "Windows 95" actually does the trick.
windows 8 you have impressed me yet again.
If you don't know how to set it to run in compatibility mode, here are the steps:
1. Find your Psychonauts exe (should be in your steam folder, under steamapps/common/Pschyonauts/Psychonauts.exe)
2. Right-click it and select "Properties."
3. Under the Compatibility tab, check the Compatibility Mode box, and select the version from the dropdown menu (Windows 95). (You may need admin privileges, especially if changing the launch option for all users.)
From then, you should be able to launch it normally (either through a shortcut or through Steam).