Alright, my guess is that FTM creates that folder if it doesn't exist, but that's not happening for you, because FTM doesn't get that far. Anyway, the point was to learn if the tree file was the cause or not. If it's not there, than the FTM file itself can't be causing it. And that's probably a good sign for your data that you won't have to resort to your backups.
I really don't know what to suggest at this stage. It could be an issue with .NET or FTM or both. If you conscientiously followed the manual removal steps for FTM files and registry settings, and that KB article tells us everything we need to do, then that *might* eliminate FTM as the culprit. Hopefully someone else who has suffered .NET issues will offer some input.
Another idea. Did you try restoring Windows from a recovery point prior to the .NET upgrade?
I really don't know what to suggest at this stage. It could be an issue with .NET or FTM or both. If you conscientiously followed the manual removal steps for FTM files and registry settings, and that KB article tells us everything we need to do, then that *might* eliminate FTM as the culprit. Hopefully someone else who has suffered .NET issues will offer some input.
Another idea. Did you try restoring Windows from a recovery point prior to the .NET upgrade?