i just installed civil 3d 2012, service pack 2.1 and the the hotfix in this order
and it worked so something went wrong with your installation at some point
I'm going back a step further and recreating the Network Deployment. Since Civil 3D wont run after the reinstall I'm going to believe that there is a fault in the deployment. It isn't the pathing but maybe I accidentally deleted a file or folder. Who knows!