game hangs on logout/22 cache files missing/steam reinstalls lotro loop

Ive been playing for about a year now with no major software problems - until yesterday. I exitted from the lotro client
as I normally do and the program hung (black window and no response). logged back into the game, everything fine,
and could not log out again. ran steam verify cache - 22 files missing. let steam download the 22 files
and when I press play, steam reinstalls lotro (initial setup - dxdiag, net framework, m, etc) then lotro downloads
all the updates/patches/ 12166 files. run the game, login and play just fine, and STILL cannot logout. game
hangs and 22 files missing. I am on my 3rd reinstall and thats enough. downloading lotro thru steam does not
fix the problem - something else needs doing.

windows 7 64bit with latest updates
intel i7 quad core 8GB RAM
nvidia 560 running 314.22 drivers (320.18 causes nvidia drivers to crash)
chkdsk says disks okay
virus scanner says nothing on machine
temperature monitors are normal
windows 7 event viewer has the useless entries for lotroclient hanging event id 1002

ideas anyone (other than login and never logout)? thank you