Windows 7 and C++ issue

So I am stumped on this issue. I have a laptop (Lenovo T540p) that my friends dad owns and is now not starting. Limited information on when this occurred (he does not remember well), but this is what it is doing. BIOS part starts fine, get the "Starting Windows" with the flags no prob, then the welcome screen and then that's it. At the bottom it says Windows 7 Professional, the light blue background with the leaves; but it just sits here for about 1 minute. Then a pop up shows up (see attached pic)

I can however get in to "Safe Mode". When the pop up shows up, if I click OK, the screen flashes and it just reappears after about 20 seconds so it is stuck in some loop I guess.

Now what I have done (not in this order though):
* Reboot, F8, select Last Known Good Configuration", gets past the Windows Start, but hangs at a black screen
* In Safe Mode I ran sfc /scannow, results say everything is fine
* In Safe Mode I did a clean system boot, same results after rebooting
* I saw he had some programs way outdated, so updated some (i.e. Flash Player, Firefox) However, some I cannot uninstall nor install the new one in Safe Mode (i.e. Adobe Reader, Java, C++ 2005, 2008 and 2010)
* Cleared out the temp and %temp% folders
* During boot up pressed F8, selected Repair Computer. Tried to repair but it says it did not find any problems
* They are using Avast and it is the current version, but in safe mode the service is not on.
* I ran Malwarebytes, nothing found
* I ran AdwCleaner, nothing found
* I looked for the last system restore and there is only one entry; date 9-18-2014 but have not tried this

So I am kind of stumped as what else I can do. Any help would be greatly appreciated

@Miles - Let me call them. In the control panel for printers there is nothing there, but I will double check

@Slart - No it was not downgraded. Not dual boot either. I will get the screenshot.

OK, the printer is a Canon MX870 and he hooks this up via USB

For the drives, here is the screenshot. The 7.45GB is my thumb

I just did a Kaspersky scan and nothing as well.

Now that you mention NET, I see that he has 4.5 installed, but I do not see any other lower version which seems odd.

What do you think, if I try to reinstall the C++ versions?

Here is the current event viewer. All the 7001 say the same thing, except the 10005.

Capture1 - 10005 I am not sure if that is what is causing this or it is being caused because the laptop is in my home and not his.

Capture2 - I looked at doing the system restore and I got this once I selected the only one available. Never scene that.