Maybe a whole system restore is the only thing to get rid of whatever is wrong/corrupt. What a pain. Don't suppose you have an old system backup handy (that reminds me... must do a system backup)?!
Dunno if you've read THIS thread, which also suspects the Protexis licensing issue, but gives another possible solution.
If it is something to do with Protexis (which is not automatically uninstalled when you remove Painter) maybe try removing it - note that other Corel programs are/maybe linked to this licensing program and by removing it they may also stop working too. When you reinstall Painter, it will/should also reinstall Protexis (which runs PSIService.exe). You can't uninstall Protexis via the Add or Remove Programs function, cause it doesn't appear there. Here is a link to their website (see bottom of page) that tells you how to uninstall it. I haven't tried this and it's a complete guess on my part whether it will hinder or help - so it's up to you.
Corel Paint Shop Pro also seems to have this error issue... HERE is Corels solution for that program, but goodness knows if it also works for Painter.
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