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I've also run the "repairredist.bat" in hopes of it repairing it, but to no avail
It's either missing a system file or a file from the installation folder. Files that could be missing from the system are DirectX9 (which Steam should install) or Windows media playback files. Are you able to watch any mp4 videos in Windows Media Player?
If it doesn't work after the above steps, could you make the error show up again and do this: http://steamcommunity.com/app/431960/discussions/2/1473095331509794520/
Also, I've added the entire folder of Wallpaper Engine's install directory to Malwarebytes exclusions, so it should'nt be blocked by anything.
I also had this error before I even installed Malwarebytes.
However, you should be getting a different error if this was the problem and I also haven't built the program to require them at all. But since it stopped working after resetting the PC, it seems more likely something is just missing that was installed before.
Could you close Steam and launch the program directly from here: C:\Program Files (x86)\Steam\steamapps\common\wallpaper_engine\wallpaper32.exe
Then right click the tray icon and open 'settings', does that work?
From your pastebin I can see that it's still missing steamclient.dll. So it seems that the process either dies before loading that from Steam or maybe *because* of that. But even when Steam is closed it might still try to load those anyway, so maybe this test is pointless.
and this is after closing the application error around 10 times, same error just appears 10 times.
What if you launch the program with the third option in Steam, the one that says "disable hardware acceleration"?
For this to have any effect, you need to make sure that it's fully closed, i.e. the tray icon is gone too.
I just tried this myself, the file shows up as I expected, but the program didn't crash. But still, this should not be loaded by Windows under normal circumstances, so it's weird.