Seems ZoneAlarm was actually not only stopping internet service, but actually preventing computer access rights to run any program at random, unbelievable! I never heard of this, but its been 2 weeks and the problem has not repeated with Zonealarm removed!
Reason why this was not detected earlier was Zonealarm never successfully uninstalled the first time, still running in the background.
Currently burning [literally] zonealarm install discs in the rubbish...
Thanks for your help!
Edited by Ranosb, 13 December 2011 - 04:43 PM.