Well well, this worked! I'm still flabbergasted that we have to check the custom path as well as check the ob box, something that is EXPLICITLY indicated that Steam users SHOULD NOT do. Something really went wrong in this patch. :doh:
Anyway, sequence of my own recovery, if anyone is interested. (Steam openbeta user).
1. Run DCS without VAICOM, to verify all ok. Loading was successful. Closed DCS.
2. Run VAICOM to check "use custom DCS path", point to Steam installation folder, and checked "ob".
3. Run DCS. Loading failed as usual at 10%.
4. Closed DCS and VAICOM, initiated Steam verification of game files.
5. Instead of 3 files found faulty, 5 files are found this time.
6. Launched DCS without VAICOM. Ok to launch. Closed DCS.
7. Run VAICOM normally. Run DCS.
8. Things seem normal as per the good old 2.5.5 days.
Thanks to everyone who helped!