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Neither of these worked :(
http://i.imgur.com/T48EoWF.gifv
Now, you need to wait after clicking on the delete then "ok" button, and allow the page to refresh.
It may seem to hang and not be working, but don't click on anything until you see the main page refresh and flash.
When you see that happen, click "ok" on the settings window and try again to see if it resolved the problem.
http://steamcommunity.com/discussions/forum/7/1484358860937061991/?ctp=3#c1484358860938167664
The "library only" issue for most lately, seems to be a specific Windows update. Make sure that update is installed if it applies. Otherwise, make sure Windows is fully up to date anyway.
http://steamcommunity.com/discussions/forum/1/1484358860945948614/#c1484358860946114842
All the recent threads where users have the same issue you have, or one very similar, point to making sure Windows is fully up to date. Have you made sure to run Windows update just to see what it reports ?
EDIT...Also, what is your antivirus program ?
I usually suggest to test these issues in safe mode with networking. If the issue goes away there, it is surely a software conflict in a normal boot that is causing it. Software like antivirus or other security software, for example.
Run msconfig from Windows start and check the startup tabs and services tabs. See what is actually running on your machine, even in the background. Some of that there, depending on what exactly you have, may be causing issues.
Especially if you have Kaspersky and say, maybe, another background security process like Intel Security Management, for example only.