Hi Oldirishlad!
Actually is not a "solution", is just a temporary workaround that makes it work, but does not solve the problem. Below I will explain another possible workaround.
About generarting an .exe file, you cannot do this from the Adobe AIR Runtime (which is what you download from get.adobe.com/air/). To generate it, you have to use Flash Professional IDE or ADT. The first software is the famous ActionScript development environment and the second is a command-line tool provided with AIR SDK (Download Adobe AIR SDK). To use them, you must have basic programming skills, this is not for end-users. If you are not the developer of this app, this is not an option for you. If you are, you can take a look at adt options here: Adobe AIR * Packaging a desktop native installer. If you use Flash IDE, you can find the option to generate .exe in File menu > Air Configuration (or something like this, I used to use it in spanish).
The other workaround is related to the root of this problem, at least in my case. And you can apply this even if you are not a developer. I found that this error is caused by installing Windows Update KB2962123. To uninstall it, follow these steps: http://windows.microsoft.com/en-us/windows/remove-update#1TC=windows-7
I hope it helps