Windows XP Pro Locks Up on Login Screen

First, a little background, which may or may not have any bearings whatsoever on my problem:

I run a mobile IT business that specializes in PC tune-ups (super easy), repair and installation (easy), and malware removal (sometimes hard, but for some reason despite my lack of training I have a 100% success rate since I started the business a year ago). I kinda got in over my head when I took on a small corporate network (dental office) with 11 PCs plus a server running Windows Server 2003. They were kind of plagued with problems before I showed up on the scene, and were sick of paying $110 an hour for an MCSE guru to come out to their office a few times a month, but since I took over they have had some crazy stuff go on, such as a remodel during which a port switcher and then a router just up and died (and the contractor decided to "do me a favor" by having the phone guy wire ethernet jacks, poorly I may add, when he was there), an ISP switch which involved reconfiguring the network from 192.168.1 IP to 10.1.10 (no biggie there, really, but some of their equipment refuses addresses not in the 192.168.1 range, and are not configurable. And don't even get me started on the new printer or email configuration - suffice to say I actually brought software bugs to the attention of Comcast, AT&T, and Yahoo!), and a possessed PC that shut itself down every night no matter what its configuration (since fixed by doing I forget what, but it seemed to be the last thing a reasonable person would try).

OK, I'm rambling, and need to stop. Recent issues:

- A PC that for some reason needed an x-ray sensor plugged into a front USB port (to my knowledge the back ports are also USB 2.0, but I may be missing some knowledge of the USB standard here. I didn't think any physical location had priority) suddenly became underpowered on that port (according to the program vendor). I resolved this (I hope) by plugging everything into a powered USB hub plugged into a rear port.
- The same computer lost use of its keyboard (USB) for a while (it works now) and on at least two other PCs I noticed a serious lag when I plugged in a keyboard (they use the PS2 port, and apparently work now).
- Another computer's (the possessed one) antivirus (AVG Network Edition) scan freezes when it hits C:\Windows\System32\Drivers\usbehci.sys (it will go on for days), although the file is not apparently infected. Today the scan found two trojans (generic17.BAYJ, generic12.BGOW) in the System Restore files but they were supposedly healed, and subsequent scans indicate the PC is clean. It may be worth noting that this PC is used for remote login (through Windows, to a limited user account, but until very recently it had Symantec PCAnywhere installed.)

Dagnabbit, that's two full paragraphs and I haven't even gotten to the issue at hand. Here it is:

A fourth PC freezes up on the login screen for Windows XP Professional. It will boot in to Safe Mode just fine and function as well as it can there (networking works, but a couple of the dental programs' drivers won't function) but during normal boot up the keyboard input and mouse cursor freeze after a 0.25 to 1.5 second delay, and Ctrl-Alt-Del doesn't work, it must be powered down. In safe mode a virus scan indicates it's clear (I know that's no guarantee) and I have not yet put it through the rigorous anti-malware tests published on this board (will try tomorrow). Any attempt (to any restore point) at system restore results in the same problem. I tried detaching devices and peripherals one at a time until I was down to keyboard, monitor, hard drive, and RAM, even though the RAM tests OK and device manager shows no problems. The system event log does not indicate any catastrophic change during the period when the PC took a dump.

I am at a loss. My next step would be to boot to the Windows Recovery Console and try to repair the OS, but I am here to ask for any other suggestions, since although their data isn't at risk (it's backed up daily), but because the motley crew of poorly-written software a dental office is forced to use will be a major pain in the tookus to reinstall and configure. Consequently I'd like to avoid a full OS reinstall (I'm not positive they even have a disk) and if that didn't work I'd hate to tell them they need to replace a computer that's a little more than a year old (Dell Dimension XPS 730, but my memory probably doesn't serve me correctly).

Any help would be GREATLY appreciated.

TYVMIA


P.S. If your reply includes the words "rootkit" and "keylogger" in the same sentence I might kill myself, or at least cry like a nine year-old girl.

 

I have repeated the crux of your post here to save others going through it. I think this will increase your chances of people reading it.

Working in Safe Mode suggests drivers are up the wattle.
You could try a Repair Install rather than going to the Recovery Console. Instructions here:
http://michaelstevenstech.com/XPrepairinstall.htm
I think you can do this with any XP Pro disk.

And you could always try checking if you've got a keylogger in your rootkit... Please post result of this suggestion on YouTube. :-D