I've never played this game. I have 2 friends that also have this error. I'm wondering if Sega even realizes just how many people are running into this problem.
2011/08/07 11:51:16:808 INFO H$a.a: Logging to 'c:\program files (x86)\steam\steamapps\common\spiral knights\.\projectx.log'.
2011/08/07 11:51:21:762 INFO H$a.a: Updating Getdown with c:\program files (x86)\steam\steamapps\common\spiral knights\.\code\getdown-pro-new.jar...
2011/08/07 11:51:23:967 INFO H$a.a: Steam initialized.
Loading: net.java.games.input.DirectAndRawInputEnvironmentPlugin
2011/08/07 11:51:34:087 INFO H$a.a: Connecting [host=game.spiralknights.com/184.73.214.58, port=47624]
2011/08/07 11:56:23:836 INFO ad.isLoggable: Previous message repeated 1 times.
2011/08/07 11:56:23:836 INFO H$a.a: Idle state changed. [idle=true]
2011/08/07 11:57:23:635 INFO H$a.a: Idle state changed. [idle=false]
2011/08/07 11:58:22:167 INFO H$a.a: Checking for sessionKey.properties [file=c:\program files (x86)\steam\steamapps\common\spiral knights\.\sessionKey.properties]
2011/08/07 11:58:22:170 INFO H$a.a: Browsing URL [cmd=cmd.exe /c start "" "http://www.spiralknights.com/loginbridge.xhtml?appDir=c%3A%5Cprogram+files+%28x86%29%5Csteam%5Csteamapps%5Ccommon%5Cspiral+knights%5C."].
2011/08/07 12:02:23:828 INFO H$a.a: Idle state changed. [idle=true]
2011/08/07 12:10:48:483 INFO H$a.a: Idle state changed. [idle=false]
Tried Facebook, tried Steam Authentication, tried making a separate account.
I mean, I don't even know if this game is worth the hour or so I've spent trying to get it to play. I am thinking not. Given the Google searches and the lack of official information on how to fix this, I'm not sure there *IS* a solution. Btw, I designed this post to be the one that will show at the top of all Google searches for this, so it might help to actually have a solution here.
Re-launch the game again, but don't only use the steam login option. Then post the projectx.log file again.