The computer is joined to a domain, all users exhibit the problem on this computer. Everything appears to work fine on the computer with the exception of explorer.exe. The issues seems to be this. The system boots up, and the user logs in, and the desktop is displayed. They can do everything on the computer they need to do until they try to double click my computer, or try to load control panel or any other features that use the windows explorer as a base. What happens exactly is nothing. You make the double click on the icon or right click and choose open and your cursor switches to the pointer with hour glass for a brief moment and then goes back to normal. No window opens up. The system runs without errors aside from this symptom.
What I have tried:
I ran Malware bytes and it did find some suspicious things and cleaned them out. I thought this would fix the issue since it had an entry that was related to explorer in the registry it was fixing. After the reboot the issues still persists and Malware bytes now says the system is clean. I ran a HiJackThis and found nothing unusual that i can tell. I have attached this log for your own review. I have run PROCMAN, and found that there are some suspicious things that happen with explorer.exe where it will open a file similar to "c:\windows\MO" where  is a box, and the O is a circle. They are special characters and the system is saying the file name is invalid. I cannot see these folders or files in the system though when i remotely view the file system from our remote software. It is possible that they would not be shown if the file names are really invalid like they show. This system runs Kaspersky AV. I don't know what else to look for on the system.
Thanks for any assistance!
Edited by hamluis, 15 September 2011 - 02:22 PM.
Moved from XP to Malware Removal Logs.