Jon Egerton-Kemp advised to run sqlsrv -X -Pquine , but that does not work either. "getting servername.krg is not there" (though its' there).
It connot find servers under C:\Sybase thought everything is there. I thing something else is here.
Don't think SC could cause that much demage.
I have "generated by storage access violation" in the error log and secerely hope that all this because of that message.