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I believe "Failed to find Steam" happens because the game makes incorrect assumptions about the location of Steam, only looking in the default location for a 32-bit Windows machine:
C:\Program Files\steam
If you have 64-bit Windows or have chosen a custom location, the game will "fail to find Steam" because it's only looking in that location.
Users of 64-bit Windows have Steam located here:
C:\Program Files (x86)\steam
The solution is to add your Steam location to your path. I would love to give thanks to the thread that showed me this solution but it took the mods a day to activate me, and I've lost the link.
Here's how to fix it -without- using copy protection disabling hacked .exe files:
1: Right-click on "Computer" (in XP it was called "My Computer") and click on Properties.
2: in Vista / 7, on the left click on "Advanced System Settings". On XP, Google search for how to change your system path, because I can't quite remember where things were in XP.
3: In the Advanced tab, you'll see a button for "Environment Variables". Click it.
4: In the upper section of that new window, you should see something like "User Variables for [your username]". Scroll through to find the one called "PATH".
5: Highlight the entry for "PATH" and click "Edit...".
6: You'll get a too-small text box that has a field on the top for "Variable Name" and a field under it for "Variable Value". Put your cursor into the "Variable Value" field and hit the [End] key so you know you're not inserting text in the middle of another entry. If you push the right arrow key it should not scroll.
7: Add a semicolon [;] to separate your new entry from the others. This is the key to the right of the 'L' key, without pressing Shift.
Correct -> ;
Incorrect -> :
8: Paste in the path to Steam, which for me on a default-install Windows 7 64 system is:
C:\Program Files (x86)\Steam
9: Press OK, and re-launch Steam so that it gets the new environment variables. (It might work without re-launching, but hey why not.)
10: Run the game normally!
This should work with any custom location of Steam, for any games that have trouble finding Steam when they launch.
Newly discovered: the game opens normally when you go through the store page.
What gives ?