First off this game is quite the treat and I am enjoying it immensely.
I did however find a bug and a related fix for the problem.
I started up the game without any headphones or speakers connected to the computer resulting in an Xed out speaker icon in the task bar. I was able to start the game and play up until I got to the section with the grate where you are told to walk quietly beneath the two guards or they would be alerted.
So long as no speaker/headphone was connected to the computer, the game would crash each time just as you walk behind the tree silhouette. Once I had a pair of speakers connected to the sound card the crash was resolved. I have not tested to see if this crash occurs on any other levels, but it sure does make it difficult to progress when just starting to play the game. XD
Again, thanks for the marvelous game, and have a wonderful new year.