First let me apologize if I seemed terse in my last reply.
I sat down at 8 pm to have a flight and had already been trying to get it working for 3 hours by the time I posted the error.
It is now 2:30 am and I have managed to get it working again, and without reinstalling windows
This was what I ended up having to do:
Uninstall IF and make sure the program folder gets deleted.
Uninstall FSX and all addons again making sure that all folders are deleted
go into c:\windows\winsxs and delete all folders starting with x86_microsoft.flightsimulator.simconnect (there should be at least 2 but could be more depending on how many add-ons you had installed)
VERY IMPORTANT run regedit and search the registry for all instances of simconnect and delete those registry keys. (if you do not do this step it will not matter how many time you reinstall FSX it will not recreate the simconnect folders as it see's the keys and thinks they are already there.)
At this point you can now reinstall everything and FSX will fully recreate the necessary Simconnect files and all will work again.
Now I figured all this out by just trying various different things until I got one to work.
I short way to try would but just to delete the simconnect folders and registry keys and then do a repair of fsx and it should recreate them but I can't verify this.
Anyway there you go a working system to fix this issue without reinstalling windows.
---edit---
I should add this is using Win7 64bit other versions of windows may need a slightly different procedure