I've been having odd problems with CELStart, I can run normal examples, but I can't get any python samples to run. I had the exact same problem on 1.2.1, and 1.4.0, with python 2.4, 2.5, and 2.6. Here's the error it throws every time:
Do you use pre-compiled binaries or did you build CS/CEL yourself from sources ?
In any case, setting PYTHON env var to the python[.exe] binary and/or PYTHONHOME to the Python install directory might help.