I tried tinkering around with the files in the steam directory at one point, but that was only to see if I could 'force' it to use my mod. That didn't work.
Now I am running into the same thing. After I downloaded Crusade, I tried to re-install my mod by changing the new versions of the xml files. I had a few missteps where the XML was bad and I was prompted with the errors. I eventually got past that, but apparently whatever I had at that point would cause the game to crash when it was in the 'galaxy creation' steps.
And I'm back to the same place I was before. Right now, ANYTHING I do to my mod files doesn't seem to make a difference. I understand that there could be something fundamentally wrong with my xml files, but even so, if I go out and change all three xml files' extensions from '.xml' to '.xmlsave', that should basically disable my mod, right? There aren't any '.xml' files in the /mods subdirectory. But it still crashes.
It is as though the first 'working' version of the mod that got past the syntax checking is somehow locked into place and no matter what I do, it will not refresh.
I am trying the 'verify files' option in steam. The first try it told me there were 22 files that needed to be re-acquired. The second attempt it said that all the files verified successfully. Renamed all the '.xmlsave' files back to '.xml', restarted the game, and it crashed again.
The only way i can get a game to start is if I go into the options and turn off all mods.
Next I tried moving all three mod files out of the c:\users\.....\game directory into c:\temp. When I do that, the game will start. That is with all of the \Mods folders completely empty.
Then I tried copying the xml files from \temp back into the \Mods\MyMod\Game folder one at a time. It seems like the game still crashes if any of them are there.
As a last resort, I kept just two of the xml files in the \Mods\MyMod\Game folder and copied the 'distribution' copy of the files out of the steam directories where the game is installed into the \Users\....\Mods\MyMods\Game folder. So what is actually in the \Mods folder should be unchanged. It still crashes. As a last resort I tried turning off my anti-virus program, and that didn't make any difference either.
Once you create a mod or make a change to an existing mod, is there something else you need to do - some other program you have to run - to enable it, or verify it or something?