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If this hasn't been resolved yet, give this a try: Steam Support > How to remove and refresh your Steam files
I ran a system restore to right before I ran the updates and everything worked again.
Firstly, note that being in the US is largely irrelevant to the server issues. It can be worse, and not better.
I guess you're assuming Valve's American so you should be OK? I'm afraid it just doesn't work like that. If you're in the US it can make the problem WORSE though, as there can be congestion when there's a lot of people on (and accounts have shot up recently).
SO you could try changing region (if you can get that far) - you are often better choosing a region on the other side of the world as they will predominantly be asleep.
But it's most likely going to be something like the user above - changes to something which is conflicting and preventing access. Try looking at your antivirus suite to see if Steam's suddenly been blocked access. Alterntaively, have you updated anything else or added anything else recently (check any auto updates too)'
Did you read the whole thread?
Have you actually established that it's not some other issue than net congestion?
If you have and it all boils to down the current install in some way, if you don't have a restore point there is only one alternative and you can probably guess what it is - a complete reinstall.
This is why restore points are important. I suggest you set them up for the future
If you run it in compatibility mode it seems to work, including starting a game.
(Right click Steam -> Properties -> Compatibility tab -> Run this program in compatibility mode for -> Windows 7)
What has likely happened, is we all updated Windows 7 to W7 Service pack 1. There is some sort of incompatibility without reinstalling I assume, so you must run it in compatibility mode for W7 without the service pack.
Hope this helps someone.