Engine Error : Requires a Source Engine Game for Mods

Hi all. I have been looking around a few forums for an answer to this but no luck so far.

When I try to start Gmod I get an Engine Error : “Source engine game required to run mods”
and then it goes back to desktop and steam UI.

System Spec : Amd Athlon +3000 ( 1.8Ghz )
1.0 Gb DDR 400Mhz ram ( 2 x 512Mb )
GeForce 9400gt 512Mb
250 Gb SATA II HDD
Windows XP Home Edition SP3
DirectX 9

I have most of the Source Engine games bought , installed and tested. ( TF2 , HL2 and episodes , CS:S etc. ) and up until a few days ago it has been working fine ( Bought it 2 days after release on steam )

All my other source and steam games are working fine so not sure what else to try.

Tried so far : Reinstall GMOD ( deleted all GMOD folders and files from steam directory )
Reinstall Steam and all other games ( again deleted ENTIRE steam folder )
All drivers have been updated in the last few hours as well as Direct X
The Windows XP install is less than 2 months old

I have looked at forums ( Garrysmod.org , Facepunch , Steam Support Forums Etc. )
But no one seems to give an answer on how to fix it.

The only thing I have changed that might cause the problem was switching to the new BETA Steam UI but I have 2 other PCs with steam accounts and they are running GMOD just fine with the new BETA Steam UI so that is probably not the problem.Really at a loss what to try next ( trying to find out hop to revert to the old Steam UI just in case ) so any advice greatly appreciated.

OH and sorry about wearin out your eyeballs. I know I am a bit LONG WINDED.
THANKS FOR LOOKIN!

This is happening with my other games,but it instead throws me an engine content error.

Well not %100 what i did different but it works now.

I uninstalled all games through steam UI. Then uninstall Steam itself and hunted down a few left over registry entries ( only 2 or 3 it missed ).

Did full reinstall of steam and then games ( HL:2 and episodes first , Then TF2 , Then G-Mod ) not sure if the order of install makes a difference but thats how i did it just in case.

Also I tested each game after install and before beginning next install.Again not sure if this makes a difference but it might.

My TF2 started to mess up as well ( wouldnt stop verifying game files ) which is why i went for another reinstall.

Hope this might help someone. GOOD LUCK!

EDIT : Forgot to mention. I have noticed a lot of people talking about what source games are required to run Gmod. I have the version that was released after the Orange Box ( I bought all my games separately ) and it seems to run with only HL:2 installed in the past. I bought it before I had the episodes or TF2 ( only HL:2 installed ) and it ran fine. I bought the Episodes mainly for the models and content it gives to Gmod.

We know Garry’s Mod only requires one source game (hl2, css,tf2 ect) to run.