Having tried everything from reinstalling ATI drivers(10.1, 10.5, 10.11, 10.12, 11.1a beta, 11.1a hotfix, 11.1 whql, 11.2), uninstalling/Modifying codecs, reinstalling sound drivers, updating DirectX, etc., i still can't seem to figure out what the issue is with the videos. In windowed mode the videos run fine only in the background with task manager in the foreground. Strange :S
Everytime a pre-recorded cutscene starts the console reports:
"D3D device is lost. Attempting device reset."
"seems like infinite loop in gpu sync query."
I can't seem to figure out if the problem is with my GPU drivers or my current OS & Software setup. So the only solution seems to be replacing the individual video files with 0 byte files.
STEPS:
1) Navigate to "root\GameCrysis2\".
2) Locate the file "Videos.pak" and rename it to "Videos_ORIGINAL.pak" or relocate the original file.
3) Download the modified "Videos" folder from here -
Videos.rar
4) Unpack the contents to "root\GameCrysis2\" and a "Videos" folder should appear with a lot of 0 byte files within.
5) Start the game and you'll notice that the levels load without the cutscenes.
This isn't a solution people. Its only a workaround that trades the recorded cutscenes for uninterrupted gameplay.