well… I thought the “wgs” folder is similar to the steam-cloud-cache folder and this holds the settings files. The assumption is then, that may be some of these files becomes corrupt and this a) may be only localy or b) allready in cloud. If you remove the local files (backup) steam should load the settings which are stored in cloud. Is of course only a guess, derived from the “wgs” hint.
EDIT: in other words… may be in case a) the removal (backup) of C:\Program Files (x86)\Steam\userdata\YOUR-USER-ID\1250410 ( in case you have steam installed on C: ) can fix it.