Which options did you try? Did you try deleting prefs folder?
You could try stepping back to Java 1.5; ie: uninstalling java you have & re-install from Java 1.5 (take the JRE).

I am still wondering whether it's a graphic card issue. Perhaps a clash between a graph card driver & Java. Otherwise, a setting such as 3D or game setting.

Did you configure your firewall so it allows LW full access (advisable not to have 2 active firewalls b/c they can interfere with each other); Firewall configuration instructions (click on link)