.pst was not a .pst, now office will not start

Ok so one of our machines is having a little fit of rage with office365 small business premium.

It started when the user installed itunes. She had the storage for itunes pointed to her My Music folder (which is default for itunes) which is redirected to herhome drive (H:\)

which is a share on the server. after she installed itunes it prompted her to shut down outlook, or to restart outlook once itunes had installed. She quit outlook and proceeded with the install of itunes. When she went to open outlook she recieved the message " .pst is not a .pst file."

Here are my steps thus far

1: I made a backup of the .pst

2: ran the scanpst.exe (Attached was the inital log from that)

3: tried in outlook again

4: connected to data file on another machine (my laptop) works just fine, File is 3.66gb .

5: Transfered all of her newly aquired music to her...