Srcds not running correctly?

Computer Specs:
Ram: 3Gb
OS: Windows XP Pro 32bit
Video: Nvidia GTX 260
Proscessor: Intel Core i7 920 2.63Ghz

I am trying to run a gmod server with the srcds from the hldsupdate tool running on console mode. I go to start it up and get on and all the weapons spawn as null entities. I cannot figure out my issue here as I have re-installed it multiple times with a fresh install and tryed without intsalling anything onto it and the issue persists. I am running the server on my personal computer, because as the specs suggest, it can handle it with ease. I dont need to hear stuff about how you cant do it, its not possible, because it is. The main issue with doing it that way is ports, which is easily fixed by adding an extra internal IP to your machine, which I have done.

Back to the weapons spawning as null entities though, They appear floating straight up, with no physics. I can pick them up, and they work fine, untill, I install CSS realistic weps and I try to throw a knife, it sticks from where its spawned when its thrown right by my head and disapears in a few seconds. I have tryed Darkrp weapons as well, same issue except when you go to press E on them to pick them up, it just doesnt work.

Any help with this issue will be GREATLY appreciated as I have been fighting with it for a few days now, I have asked on srcds.com, havent had any luck there, and Im getting ready to go to steam as well.

Didn’t know they had I7 290’s…

They dont… Its 920 sorry Typo!

You should fix it for clarification.

Anyone?

No one has any idea? I have re-installed the server multiple times now…