Hello folks, Google searches and browsing through forums haven't helped me with this problem and with multiple term paper deadlines creeping up on me I can't spend more time researching a solution. I'm hoping that other people on this board have more experience troubleshooting these kinds of problems than me. I'll try to give as much detail into the problem and my machine's specs as possible. Thank you! :)

The Background:
I bought Legend of Grimrock 1 when my GPU was still a measily Radeon HD 5450, and it worked fine though I had to turn down a lot of the special effects. Now I have an NVIDIA GeForce GTX 760 4GB and it runs most modern games (Counter Strike: GO, Killer Is Dead, Dark Souls, L.A. Noire etc.) very smoothly with high graphics settings.

The Problem:
However, I had an itching to play Legend of Grimrock in earnest, and when I started the game, it would give me this error without so much as a black screen popping up beforehand: (See capturelogerror.png)

At this point, I tried scanning forums and doing Google searches and found a couple of people with the same problem, but most were related to them using sub-minimum spec integrated graphics cards, and I tried some of the solutions that worked for them which involved going into the .cfg file and making sure the resolution was set to your native resolution, and making the game launch in windowed or borderless modes. I also tried GoG's suggestion and installed a DirectX runtime package.

Those didn't work, and my graphics card's drivers are up to date, so I'm not sure how to proceed.

Shortened dxdiag: (Let me know if something is missing; life is hard without spoiler tags)
------------------
System Information
------------------
Time of this report: 3/22/2015, 14:07:49
Machine name: OWNER-PC
Operating System: Windows 7 Professional 64-bit (6.1, Build 7601) Service Pack 1 (7601.win7sp1_gdr.150202-1526)
Language: English (Regional Setting: English)
System Manufacturer: Gigabyte Technology Co., Ltd.
System Model: GA-78LMT-S2P
BIOS: Award Modular BIOS v6.00PG
Processor: AMD FX(tm)-4100 Quad-Core Processor (4 CPUs), ~3.6GHz
Memory: 8192MB RAM
Available OS Memory: 8190MB RAM
Page File: 3040MB used, 13336MB available
Windows Dir: C:\Windows
DirectX Version: DirectX 11
DX Setup Parameters: Not found
User DPI Setting: Using System DPI
System DPI Setting: 96 DPI (100 percent)
DWM DPI Scaling: Disabled
DxDiag Version: 6.01.7601.17514 32bit Unicode

------------
DxDiag Notes
------------
Display Tab 1: No problems found.
Sound Tab 1: No problems found.
Input Tab: No problems found.

--------------------
DirectX Debug Levels
--------------------
Direct3D: 0/4 (retail)
DirectDraw: 0/4 (retail)
DirectInput: 0/5 (retail)
DirectMusic: 0/5 (retail)
DirectPlay: 0/9 (retail)
DirectSound: 0/5 (retail)
DirectShow: 0/6 (retail)

---------------
Display Devices
---------------
Card name: NVIDIA GeForce GTX 760
Manufacturer: NVIDIA
Chip type: GeForce GTX 760
DAC type: Integrated RAMDAC
Device Key: Enum\PCI\VEN_10DE&DEV_1187&SUBSYS_37683842&REV_A1
Display Memory: 4095 MB
Dedicated Memory: 3072 MB
Shared Memory: 1023 MB
Current Mode: 1600 x 900 (32 bit) (60Hz)
Monitor Name: Generic PnP Monitor
Monitor Model: HP W2072a
Monitor Id: HWP3000
Native Mode: 1600 x 900(p) (60.000Hz)
Output Type: HD15
Driver Name: nvd3dumx.dll,nvwgf2umx.dll,nvwgf2umx.dll,nvd3dum,nvwgf2um,nvwgf2um
Driver File Version: 9.18.0013.4788 (English)
Driver Version: 9.18.13.4788
DDI Version: 11
Driver Model: WDDM 1.1
Driver Attributes: Final Retail
Driver Date/Size: 3/13/2015 12:41:47, 17258024 bytes
WHQL Logo'd: n/a
WHQL Date Stamp: n/a
Device Identifier: {D7B71E3E-52C7-11CF-4649-65171CC2C435}
Vendor ID: 0x10DE
Device ID: 0x1187
SubSys ID: 0x37683842
Revision ID: 0x00A1
Driver Strong Name: oem71.inf:NVIDIA_SetA_Devices.NTamd64.6.1:Section035:9.18.13.4788:pci\ven_10de&dev_1187
Rank Of Driver: 00E02001
Video Accel: ModeMPEG2_A ModeMPEG2_C ModeVC1_C ModeWMV9_C

Deinterlace Caps: ( . . . )

D3D9 Overlay: n/a
DXVA-HD: n/a
DDraw Status: Enabled
D3D Status: Disabled
AGP Status: Enabled

Are you sure DirectX 9 is properly installed? I'd retry installing it, but make sure you use the DirectX End-User Runtimes (June 2010) from here:
http://www.microsoft.com/en-us/download/details.aspx?id=8109
Run and extract the file to a separate folder, then go there and start DXSETUP.exe for installation.

Also check the Nvidia homepage for the newest drivers and if you're running the Nvidia Experience Tool, shut it down, it sometimes causes problems like this.

Afterwards, download the latest DirectX web installer use it as well:
http://www.microsoft.com/en-us/download/details.aspx?id=35.

I re-installed LoG and updated DX9 from the installer, then went and re-reinstalled DX9 through the June 2010 installer. Then, I tried downloading the web installer and it said that I am up to date. I went into GeForce Experience, and turned off the optimization, which I read that is the only way it can interact with your graphics settings. I don't know how to otherwise shut it off, but between doing that and it not appearing on my toolbar I think it's not active now. It keeps my drivers up to date, but just to make sure I went to the Nvidia site and confirmed that all my drivers are up to date.

Updated dxdiag:
------------------
System Information
------------------
Time of this report: 3/29/2015, 22:49:29
Machine name: OWNER-PC
Operating System: Windows 7 Professional 64-bit (6.1, Build 7601) Service Pack 1 (7601.win7sp1_gdr.150202-1526)
Language: English (Regional Setting: English)
System Manufacturer: Gigabyte Technology Co., Ltd.
System Model: GA-78LMT-S2P
BIOS: Award Modular BIOS v6.00PG
Processor: AMD FX(tm)-4100 Quad-Core Processor (4 CPUs), ~3.6GHz
Memory: 8192MB RAM
Available OS Memory: 8190MB RAM
Page File: 3725MB used, 12651MB available
Windows Dir: C:\Windows
DirectX Version: DirectX 11
DX Setup Parameters: Not found
User DPI Setting: Using System DPI
System DPI Setting: 96 DPI (100 percent)
DWM DPI Scaling: Disabled
DxDiag Version: 6.01.7601.17514 64bit Unicode

------------
DxDiag Notes
------------
Display Tab 1: No problems found.
Sound Tab 1: No problems found.
Input Tab: No problems found.

--------------------
DirectX Debug Levels
--------------------
Direct3D: 0/4 (retail)
DirectDraw: 0/4 (retail)
DirectInput: 0/5 (retail)
DirectMusic: 0/5 (retail)
DirectPlay: 0/9 (retail)
DirectSound: 0/5 (retail)
DirectShow: 0/6 (retail)

---------------
Display Devices
---------------
Card name: NVIDIA GeForce GTX 760
Manufacturer: NVIDIA
Chip type: GeForce GTX 760
DAC type: Integrated RAMDAC
Device Key: Enum\PCI\VEN_10DE&DEV_1187&SUBSYS_37683842&REV_A1
Display Memory: 3770 MB
Dedicated Memory: 4027 MB
Shared Memory: 3838 MB
Current Mode: 1600 x 900 (32 bit) (60Hz)
Monitor Name: Generic PnP Monitor
Monitor Model: HP W2072a
Monitor Id: HWP3000
Native Mode: 1600 x 900(p) (60.000Hz)
Output Type: HD15
Driver Name: nvd3dumx.dll,nvwgf2umx.dll,nvwgf2umx.dll,nvd3dum,nvwgf2um,nvwgf2um
Driver File Version: 9.18.0013.4788 (English)
Driver Version: 9.18.13.4788
DDI Version: 11
Driver Model: WDDM 1.1
Driver Attributes: Final Retail
Driver Date/Size: 3/13/2015 12:41:47, 17258024 bytes
WHQL Logo'd: n/a
WHQL Date Stamp: n/a
Device Identifier: {D7B71E3E-52C7-11CF-4649-65171CC2C435}
Vendor ID: 0x10DE
Device ID: 0x1187
SubSys ID: 0x37683842
Revision ID: 0x00A1
Driver Strong Name: oem71.inf:NVIDIA_SetA_Devices.NTamd64.6.1:Section035:9.18.13.4788:pci\ven_10de&dev_1187
Rank Of Driver: 00E02001
Video Accel: ModeMPEG2_A ModeMPEG2_C ModeVC1_C ModeWMV9_C

Deinterlace Caps: ( . . . )

D3D9 Overlay: Supported
DXVA-HD: Supported
DDraw Status: Enabled
D3D Status: Enabled
AGP Status: Enabled


These last bits of the display tab have changed, and excitedly I went to launch LoG and it gave me the same error. Not really sure what the deal is...

Looks better, but obviously the issue isn't solved. I'd uninstall GeForce Experience for testing, just to be sure it isn't interfering.

Further set all options in your graphic card's control panel back to default. There might also be an issue with Nvidias supersampling features. If your card supports it, you can disable this option in the NVIDIA Control Panel as well. Go to "3D Settings" and find the "DSR - Factors" option. Un-select all possible settings and confirm. This should change the setting to "Off".

The link to the screenshot isn't working here so I can't see what the error is.

However, I do know of one DirectX-related issue that was and maybe still is commonplace: the game would install a particular DirectX file to the game folder, and this resulted in Windows getting confused about where the rest of it was. Check the game's install folder and if there's a "DX9_somethinglikethis.dll" file sitting there by its lonesome, delete or rename it to something nonfunctional (like "badfile.bak") and see if that solves the problem.