I'm having the same problem.
If the dev's need any info on what I have in my computer (OS, Graphic card, etc) let me know what you need to fix it. (Nevermind, included below. ^^')
If anyone has a solution, I'm all ears. I've tried running it directly after the shortcut didn't work with same problem. I originally installed it on my H drive and got this error, so I reinstalled on C drive thinking that might be the problem, and it didn't help.
Used to play this game back in middle school and want to see what changes have been made. :)
(I loved changing .txt files and messing with the graphics in paint etc.)
This is what it looks like for me when I try to start it...
1. Operating System and version (Windows XP SP3)
2. Graphics Card (ATI Radeon HD 3850 AGP)
3. Graphics Card Driver and version (Catalyst (Don't know where to find version, if I click about it says: Version 2010.0825.2146.37182 if that means anything))
4. log.txt (I can't find it)
5. Any relevant information such as the version of Egoboo you are playing (EGOBOO 2.8.0 stable)
6. Any terminal/console output (I don't know how to do this)