Paintshop Photo will not start...

and the idiots at Corel have no idea...
Good morning Geeks, i'm running XP Home SP3.
I use Paintshop Photo X3 and have been for some time. A few weeks ago it would not open and gave me the dialogue box attached, saying that I had either a damaged or illegally modified copy. Corel did provide a link to the current version (since I own a legal copy) and advised reinstalling. during uninstall, i got the same message and uninstall was stopped. So I did the following:
--installed and ran Revo Unistaller
--ran windows installer clean up utility
--search and deleted all PSP files and folders found
--ran reg edit and deleted the PSP key in both current user and local machine
--restarted, then ran the registry clean up tool from CCleaner.

Then I tried to re-install. Seemed to be going OK but the install hung at a point late on the file WMEncoder.dll, hung for 30 minutes so I closed the install program and tried to run the app and got the same dialogue.

Not sure what to do. Corel has no idea why this might have happened. Recently have only installed and uninstalled some other programs but no other graphics programs. Have updated some drivers recently. Have updated Microsoft whenever the monthly patch is released. No malfunctions with the computer. No virus or malicious stuff showing up on weekly scans.

Can I install a program in Safe Mode? If I go through the uninstall I did earlier to get as clean as possible, then install in Safe Mode might that work in avoiding the hang?