Ok, so I fixed it. I think it was a problem with the VC 9.0 runtime. (and after realizing this and looking at the sxstrace results it seems like a no brainer.)
What I did to fix it was:
1. uninstall avast (using add/remove AND removal tool in safemode)
2. uninstalled ALL C++ components using the add/remove programs
3. downloaded visual c++ 2005 SP1 (x86 and x64), 2008 Feature Pack (x86 and x64) and SP1 (x86 and x64) , 2010 sp1 (x86 and x64) and finally 2010 express (search
www.download.microsoft.com4. restart
5. install all visual c++ in order 05,08,10 x86 first then x64
6. reboot
7. install avast
et voilà!
Note: the VC 9.0 package is part of the 2010 express package. Also the x64 package *should* contain the same dependencies, but when does Microsoft follow *should*
Note 2: Key diference and one I should ave done the first time is re-install the 2010 express package. Probably would have saved myself a lot of time and sweat.
Hope this helps! Cheers!