FIXED IT!

1.I renamed the d3dx11_42.dll from SysWow64 directory to "d3dx11_42-original.dll",

2.then copied the d3dx11_42.dll from the System32 directory to the SysWow64 directory WITH TOTAL COMMANDER. (TOtal Commander is a windows explorer shell aternative, i could only get it done with that, windows just won't do it on it's own)

3. (Important!) Then ran the direct-x setup from the arma 3 folder in steamapps.

I've tried a hundred different approaches but this was the ONLY fix.

Please consider making this a sticky, it's a >>PROBLEM WITH WINDOWS 7<< that causes the Syswow64 folder to not accept copying/moving. This could help a lot of people!!!!!!!!!

Yeah, I can run Battlefield 3, Metro: Last Light etcetera. I have a 9800gtx+, which is a DX10.1 card. It's quite capable of running DX11 (with limited functionality but that should be no problem)

Deadline is tonight, somebody, please help me fix this!!!!!!!

:S

Any other suggestions, 25th of june is closing in on us :C

Ok, so it seems somehow (even though I have full administrator access, i've forcefully claimed all the system folders and i am no noobie) Windows won't allow files to be copied to Syswow64. I run 64 bit 7 and if I rename the d3dx11.42.dll to d3dx11.42-original.dll and run the DX installer it fails at the end. Normally it just succeeds but it won't help.

Also, I can't copy the version from the system32 directory over to there.

I am full administrator of my OS, I disabled all forms of User Account Control etcetera.

I am out of ideas!!!

Sadly a clean driver install yielded zero results. :( Thanks for the suggestion though! :)