Cannot start programmes & "Failure to display security and shut down options"

Good evening all,

I've googled extensively around the issues I am facing, and tried all proposed solutions, but none have worked thus far.

Symptoms:

1. I have 1-2 minutes of freedom after booting, then I can no longer run new programmes. I also cannot close some programmes e.g. Skype. Tabs in Chrome spazz, flash player dies, and any new navigation ends up with an eternal hanging/loading problem.
2. Unable to restart/shutdown conventionally (I have to do it physically)
3. I get the error "Failure to display security and shut down options ..." when I try ALT+CTRL+DEL

Safe mode is absolutely fine, so I assume it's not anything hardware related (though please correct me if I'm being naive). My second drive which runs off XP, which I only use for storage now, boots fine and has no problems.

I have not installed any new drivers, programmes, or otherwise made any meaningful changes recently.

Solutions I've tried:

• Reset winsock.
• Shut off all start-up programmes using MSCONFIG.
• Run virus scan at boot-up, deleted 2 items (win32 installmate ... prob trojans? Was an .exe that I had downloaded but never ran).
• Run Malwarebytes scan, deleted 1 fairly innocuous item.
• Run full scan-disk check.
• Run a SFC scan - no integrity violations.
• No system restore points exist to roll back to (deleted by a virus, perhaps?)

I am totally stumped, and naturally thought that TSF's collective genius > mine.

Any help would be warmly appreciated.

Many Thanks,

G