Well mine got stuck on this after dozens of reinstalls of both java and spiral knights on steam it still wasnt working.
What got it working in the end?
When it was starting up, go to processes, find the java*32.exe or javaw.exe that relates to spiral knights, go to its location, go to its properties, set it to run as administrator, and my game now works.
Why this needs to be done I HAVE NO IDEA BUT IT ANNOYS ME TO NO END.
This usually happens when something has changed the file permissions of Spiral Knights so that you (as the normal, non-admin, user) no longer have proper permission to launch the game. The most common cause is security software marking the Java game files as a false positive.
Since Steam doesn't always properly uninstall Spiral Knights these re-install instructions should set it back to normal:
1) Right-click Spiral Knights in the Steam Library and choose the "Delete Local Content" option to remove the game.
2) Navigate to your Steam games folder (default C:\Program Files (x86)\Steam\steamapps\common) and delete the entire "Spiral Knights" folder.
3) Go to Spiral Knights in the Steam Store or your Steam Library and install the game again normally.