Lob,

Try this on your L4D server for the LAN mode only issue:

reg delete HKCU\Software\Valve\Steam\ActiveProcess /f

It happens on occasion to TF2 Servers as well. What I had to do to fix it was

1. install the Steam client, log in to an account be sure steam updates its self fully... (May not be a needed step)
2. Close Steam, run the reg edit line,
3. Then uninstall Steam Client.
4. Run the regedit cmd again. (May be able to start from this point)
5. Del BIN folders in L4D server instances... Be sure to delete client.dll specifically, but del the whole bin folder.
6. Run verify_all on your L4D server

Should be fixed.

I do not doubt I included unnecessary steps, but I always do it that way and it is fully fixed for me.

If you leave the steam client installed, you can fire it up and run the server just fine via CL, but I never like having the steam client on my server. It does have something to do with the binaries, but it is some link in the registry that is kicking the server into LAN mode. My understanding is that the update does not effectively un-register and reregister the binaries or some such issue.

Just deleting anything and re-downloading and running verify_all never fixed it for me. I always have to do the regedit command when this happens. You may not need to even install steam client and may only have to do the regedit part then del the bin files then rerun the server.

The important thing I think is NOT to run the server after doing the registry command, deleting the BIN folders, THEN running the server so it properly registers the updated dll's.

Hutch 
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