EDIT: I finally got it to work.
Here are the steps I took to fix it:
1) Completely uninstall AVG. Disabling won't do it.
2) After uninstalling, delete the AVG folder from Program Files.
3) Delete AVG from the registry (Run-> RegEdit, then find the AVG folder and delete it).
4) Restart the computer.
It works fine now. Hope this helps.