PowerShell 3.0 x64 bit broken after installing KB2506143

powershell

I have searched using all kinds of variations on relevant terms and I cannot find a single other instance of someone else having this excact same problem, so I am hoping someone here may have a clue.

Problem

I installed Windows Management Framework 3.0 (KB2506143) by downloading and running Windows6.1-KB2506143-x64.msu from Microsoft.com. Once completed I rebooted my machine as requested. After rebooting and logging in, I try to run the 64-bit PowerShell command shell and it comes up for a second then goes away. The 32-bit shell seems to work fine, it is just the 64-bit one that fails.

Looking in the Fusion logs, I found:

*** Assembly Binder Log Entry  (10/4/2012 @ 1:51:48 PM) ***

The operation failed.
Bind result: hr = 0x80070002. The system cannot find the file specified.

Assembly manager loaded from:  C:\Windows\Microsoft.NET\Framework64\v2.0.50727\mscorwks.dll
Running under executable  C:\WINDOWS\system32\WindowsPowerShell\v1.0\powershell.exe
--- A detailed error log follows. 

=== Pre-bind state information ===
LOG: User = ********\*****
LOG: DisplayName = Microsoft.PowerShell.ConsoleHost, Version=3.0.0.0, Culture=neutral, PublicKeyToken=31bf3856ad364e35, processorArchitecture=MSIL
<remainder omitted>

GacUtil reveals that there is a Microsoft.PowerShell.ConsoleHost, Version=1.0.0.0, but not 3.0.0.0.

I tried uninstalling KB2506143 (which removed MSVCRT90.dll and caused Windows Live Messenger to fail on load after rebooting again, so I ran a repair in stall on Windows Live Essentials and that fixed the Messenger problem) and then re-installing it, but nothing changed.

If it helps, here are what I think may be the relevant parts of my hardware/software environment.