something else to try, since you was able to run the DXDIAG report, it shows this:
DDraw Status: Enabled
D3D Status: Enabled
AGP Status: Enabled
DDraw Test Result: Not run
D3D7 Test Result: Not run
D3D8 Test Result: Not run
D3D9 Test Result: Not run
rerun your DXDIAG, but this time go to the video tab at the top and run the test in order that are available to do, and see what comes up, run this
DDraw Test Result: Not run
D3D7 Test Result: Not run
D3D8 Test Result: Not run
D3D9 Test Result: Not run
it might show you where your problem is....
just a thought... good luck
TC