How to fix error: Word could not create the work file. Check the temp environment variable

Working in Word 2010, Win 7 64 bit OS. In the last few weeks, intermittently get an error when opening a Word document.
Word could not create the work file. Check the temp environment variable.
Other times when trying to save a Word file, get an error: There is a problem saving the file.

Here's what I did so far to no avail:
1. Deleted all ~ temp files
2. Ran system diagnostic - passed all (interested in RAM, but that was OK)
3. Checked the registry
Key: HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\User Shell Folders
Value name: Cache
Value type: REG_EXPAND_SZ
Windows 7
%USERPROFILE%\AppData\Local\Microsoft\Windows\Temporary Internet File
4. Antivirus program is compatible with MS Office and it is updated
5. Turned off Win transparency for Windows glass, borders

Getting ready to uninstall and reinstall Office 2010 if I can't fix this.
kelliekAsked:
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Neil RussellTechnical Development LeadCommented:
I take it that you did check the TEMP directory? %TEMP and %TMP% point to valid places?
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kelliekAuthor Commented:
At some point I did - but I forget how I did it!
Could you please remind me?
And I had to create TMP in the correct folder
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