Hello again,
I nailed the problem. I just printed a "Windows Printer Test Page" and it printed just fine and no error event was logged.
What I Did
I ran the Autoruns program from Microsoft Sysinternals and selected the Print Monitors tab. I looked at the list and noticed there was an entry under the HKLM\SYSTEM\CurrentControlSet\Control\Print\Monitors key labeled "HPCLJ2600LM." From the name I assumed that this was my printer. There was an image path, but no "Description" and "Publisher" listed. Furthermore, the entry was highlighted in pink, so I knew something was wrong.
The application help was of no use, so I consulted the Windows Sysinternals Administrator's Reference and I read that the DLLs listed in this tab are loaded into the Spooler service. Furthermore it said that "One of the most common problems that affects the print spooler is misbehaving or poorly coded third-party port monitors."
I read on. Under the Autoruns and Malware section it said that one of the telltale signs that can point to malware is "Entries with an image path pointing to a DLL or EXE that is missing Description or Publisher information (unless the target file is not found)."
Aha, I disabled the entry, rebooted and viola, it worked.
Thank you very much...