File links / drag and drop no longer work with MS Office 2008

not sure what happened, but my installed and up to date version of MS Office suddenly refuses to accept file open events. Cannot double click on files anymore, nor can I drop files into the MS icons in the dock. The only way to open files is now using the "open" command from inside the application.
This error seems to be global on my system, across multiple user personalities, and doesn't go away with a restart.
Anyone have an idea what could be the problem?
Thanks,
Michael

Do a "get info" on one of these files.
About the middle of the info box is a pull down menu labeled "open with".
Pick your office app and then check the box labeled " change all".
Now double click on the type of file that pertains to the app you choose.
If this does work, do the same for one file each of the office apps.

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