My above mentioned method failed only 10 seconds after making that last post. Which made me look deeper..
I am not sure how many people this will work for, I know after days of fine tuning and memory dumps and combing over things I finally found a solution to the problem and it works 100% for me.
While looking at one of the dumps I generated, I noticed the last thing I saw was 3 letters that could have been easily overlooked. However, having owned a creative MP3 player, I knew what these three little letters mean. E.A.X. I also knew that this is a function of a "Creative" device, and I also knew I didn't have one in this new system.
So I fired up "Configure Far Cry" and got to looking around... Under sound options, there it was bigger than anything. EAX enabled.. Among a few other things like hardware mixer and such. So I turned everything but the first option off. Fired up Far Cry and it worked.. I thought to myself, this must be one of "Those times" that it works for no good reason.. So I rebooted the machine and fired up Far Cry and again it worked, and has worked over 50 times since then. So as it turns out, MS is blaming a video device driver because it's "the most likely cause" when in fact it is sound related.
Hope this helps someone..