Things got even more interesting - I tested the game on my notebook as well and it worked out-of-the-box with neither Steam nor the game being installed on the C: drive.
The only significant difference between both machines that I can think of is the storage. The desktop system is running Steam from a Win8 storage space while the notebook has it running on a regular drive.
The OP is running Win 7 though, so Storage Spaces are an unlikely cause.
Anyway, if I happen to find anything else, I'll add another note so you guys can look into this issue.