Have you run Malwarebytes in Safe Mode, or from the boot CD I linked? If Windows 7 still will not start:
Boot the Windows 7 DVD Repair console or Repair CD, click through to Recovery Tools list to run Startup Repair up to 3 separate times. System Repair Disc - Create
System Restore is automated in Startup Repair but you can also run it separately from the Booted Repair console's Recovery Tools list. Restore to your earliest Restore point to get before any corruption.
If Windows 7 starts to desktop, run Malwarebytes, MS Essentials again, install Avast 5 to run it's boot scan. You can keep both MSE and Avast running together if you need the extra protection.