Tried to re-run tonight as-is to see if the server reboot had any effect. It did not. Then I tried both running windowed mode and with downloads disabled. While the thread count was a lot less with downloads disabled, it still hung (and with GameEx running in windowed mode, I was able to see the Windows "this app isn't responding" dialog)
Installed 18.63 (noticed it had just been released), verified that windowed mode and downloads were disabled. And I still get the hang. Dropped out of Test Mode just to make sure that wasn't causing something weird to happen. Still hang.
I had been testing trying to launch 1943 (since it was near the top) and thought maybe someone was getting confused about vertical vs horizontal orientation. Launched Choplifter instead and thought it might have been different but it's not, it still hangs. It just takes maybe a little longer? Instead of hanging on the game launch screen, it goes pretty quickly to black after playing the game start sound. 1943 seems to hang on that screen more readily, but even it will go to black eventually.
There is an artwork log but since disabling downloads, it hasn't updated. Happy to upload it if you think it'd help any. Also, I never see MAME in the process list... which is probably obvious, but I'm saying it out loud in case it helps.
Finally, I downgraded to 18.62 on the off-chance that 18.63 had some sort of weird issue and .62 was where the magic was at. Alas, there was no magic there (same hang).