The problem had to be local since nobody else seemed affected.
With your assistance and pointing to the VM, I reviewed the file associations and found out that the '.img7' files were still associated with an older 'Dolphin7.exe' located in some different directory, a legacy from an earlier v 7.1.19 installation. So although I had the right VM (v 7.2.2), it was not used at all and the older version was called each time I started Dolphin.
Silly mistake. No wonder I had problems; in fact, It's actually good it still worked at all!
That was an easy fix and things went back to normal.
Thanks for pointing me in the right direction.