The "FiddlerCap is already running on this machine" message appears when the global mutex named Global\FiddlerCap is present, indicating that at least on user on the machine is running FiddlerCap already.
Now, you've said that you've "done reboots" which is interesting-- FiddlerCap (generally) doesn't run on its own, and restarting your machine would presumably be closing any existing instances.
If you try to run Fiddler in that user's account, does it work?
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