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The error you are getting appears to be related to the installation of the Service Pack 1 for Windows 7. At this point we have no solution to resolve the issue.
However as a workaround.
Instead of creating a new data file from the SWMHYMO menu, try to open an existing model that already runs in SWMHYMO, modify it to suit your needs and resave it under a different name. Then run it.
A workaround we found for this error is to open an existing input file (.dat), delete the content except for the header and resave under a different name. Then you can enter all the commands you need for your project.
One solution that worked on Win7 Enterprise.
Copy the SWMHYMO folder and content installed in the C:Program Files(86)
Directly to your c drive. As in C:SWMHYMO
Then try running SWMHYMO by double-clicking SWMHYMO.exe from the copy on your C: drive.