Your flevel file IS broken, but that might be something you couldn't notice. 4 files are broken inside.
Enable your postprocessing.
A little late reply on my part here, but I remembered this just now. So...
My flevel isn't broken, otherwise that would be something Makou Reactor would notice. I just think that it says so because I'm not using Aali's LGP tools. (and the reason for that: it didn't compress the files as supposed to in the flevel.lgp)
Also, the 4 files thing isn't right, it just repeated that message because I switched rooms 4 times.
Anyway, let's talk about the real issue.
Postprocessing didn't solve the fullscreen failure. It still reverted back to default resolution window mode.
INFO: FF7/FF8 OpenGL driver version 0.7.11b
INFO: Auto-detected version: FF7 1.02 US English
ERROR: failed to set fullscreen mode
INFO: Intel Intel 965/963 Graphics Media Accelerator 2.0.0 - Build 7.15.10.1666
INFO: PBO not supported
INFO: Found swap_control extension
INFO: Max texture size: 2048x2048
INFO: Number of texture units: 8
INFO: Original resolution 640x480, window size 640x480, output resolution 640x480, internal resolution 640x480
INFO: FBO extension detected, using fast scaling/postprocessing path
INFO: FFMpeg movie player plugin loaded
INFO: FFMpeg version SVN-r25886, Copyright (c) 2000-2010 Fabrice Bellard, et al.
INFO: No shaders, codecs with YUV output will be slow.
INFO: FF7Music helper plugin loaded
LOCK UNLOCK TEST
MATRIX INITIALIZE
INITIALIZE DD/D3D END
initializing sound...
creating dsound primary buffer
reading audio file
loading static sounds
sound initialized
set music volume: 127
set music volume: 127
Entering MAIN
Exiting MAIN
START OF CREDITS!!!
INFO: d:\square soft, inc\final fantasy vii\movies\eidoslogo.avi; truemotion2/pcm_u8 320x240, 15.000000 FPS, duration: 10.133333, frames: 152
INFO: d:\square soft, inc\final fantasy vii\movies\sqlogo.avi; h264/aac 1280x896, 15.000000 FPS, duration: 14.533333, frames: 218
INFO: slow output format from video codec h264; 0
set music volume trans: 127->0, step=60
END OF CREDITS!!!
Entering MAIN
set music volume: 127
Exiting MAIN
START OF MENU SYSTEM!!!
WM_CLOSE
END OF MENU SYSTEM!!!
Field Quit
UNINITIALIZE DD
END UNINITIALIZE DD
I also went to my accelerator settings and restored the defaults, but no luck. And I don't think I ever modified those...
What to do, what to do. I swear, it worked just fine before, then suddenly it stops working for no apparent reason.
I DID update to version 0.7.11b recently, and I think around the same time it stopped working in fullscreen. But I also recall playing the game post-updating, so there's a conflict. Ideas, anyone?