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Steam stuck at Creating local cache files

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I tried posting this on Steam's forums, but that seems to be practically useless so I'm coming to you guys for help.
I'm literally tearing my hair out here as I'm getting stuck at creating cache files. My roommate has ZERO issues getting it to work, and we share the same router and ISP.
Here is a list of things I have tried to get it to work.
Deleting .blob
Deleting everything but steam.exe and Steamapp
uninstalling Steam AND deleting it from the registry
disabling firewall
disabling firewall AND Microsoft security
checking for compatibility issues
looking for and uninstalling ALL programs that muck up steam
attempting to install in safe mode
running spybot and virus scans
resetting router and modem just because...
I'm literally out of options, so if someone knows of some obscure reason I can't create cache files I'm down to a clean windows install...
Oh and for tcp junkies out there tcpview keeps throwing a fin_wait2 status
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