Have you tried swapping Java versions? ie: uninstalling 1.5 & installing 1.4.2 instead. Just a thought if you've tried everything else. However if you do try this, I'd suggest you once again delete the LW preferences if there are any before you try to open LW again.
http://java.sun.com/j2se/1.4.2/download.html (Choose the JRE)