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.