BSOD - Stop 50 Win XP MCE - unable to start Windows Safe Mode

I am struggling with a client's Dell Dimension 5150 which has Media Center Edition installed.
Had signs of trouble about 10 days ago, so ran Malwarebytes and removed many items. Unistalled AVG due to the things that got by it and installed Microsoft Security Essetnials. Upgraded RAM to 3GB (was two x512mb, added two x1gb). Had a Canon printer dropping first few characters of emails, so downloaded new drivers and installed - did not fix that problem. Computer was running fine until yesterday, when client informed me he had a strange alert show up near System Tray. He ran Malwarebytes again, and it found some things which he elected to remove. Malwarebytes asked for restart, which he did, but computer hung. After a time, he powered it down. On next boot, he got BSOD & Stop error 50. I removed computer to attempt to resolve, and after imaging hard drive using Acronis True Image, I ran SpinRite 6.0 on the hard drive & it passed. I booted UBCD4Win to check the Malwarebytes logs to see what it had found. It listed RootKit.0Access Trojan:Win32. Using EZ-PCfix, I removed the identified file from startup list, and rebooted. Still STOP 50. I removed the two new pieces of RAM - same error. I put them back in and ran MemTest86 ver 4.0 - all tests pass. Using UBCD4win, I have run CHKDSK with no errors found. Currently I have restored the original image, then booted UBCD4win & used Registry Restore Wizard to restore system to June 4th, which is before any of the above events. Then, using EzPCFix, I deleted all temporary files and the System Restore.Points. Next, imaged again with Acronis. Now I am running Avira Live CD, which has found 5 items so far, some of which were in Windows Defender and Microsoft Antimalware quarantine folders. Exception is a TR/Spy.344576.32 and TR/Spy251904.30. Due to the number of things I had tried without getting away from the STOP 50, I would really like to run GMER, but can't boot to Windows so far - regular or Safe Mode. It seems to me that the Hard drive and RAM are not the issue, which makes me suspect rootkit.
 
How about formatting and re-installing Windows fresh?
I have that at the end of my list, but I would rather avoid all the other installs and tweaking if I can. Apart from that, I am stubborn, egotistical, and I would like to beat this thing!
(and my client hasn't found the OS CDs yet) ;-)
 
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