The only thing I could not do is delete the simconnect files as whatever I did the permission was denied.
You will have to boot Windows into Safe Mode in order to do that. And THEN, make an FSX repair AND an FSX SP2 repair too.
I uninstalled and reinstalled FSX SP2.
You should have done a repair, instead. And, as I've said, an FSX repair too.
Is completely uninstalling and reinstalling FSX likely to make difference?
It depends if the FSX installer can fix the problem you are having with your Windows installation. Sometimes is able to fix corrupted/missing libraries, but sometimes only a Windows reinstall can fix it.
The user in this thread had the same problem:
http://www.fsdreamteam.com/forum/index.php/topic,9785.msg77313.html#msg77313And it was solved by reinstalling Windows.