Good news...
I found that on my Windows 7 system the problem was due to EnableBalloonTips being set to zero in
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\Advanced
In my case
EnableBalloonTips was not present at the location specified, so I was unable to remove it.
I added it to the registry and set its value to 2.
After reboot, the right click menu showed up nicely.
Thanks for this very useful solution.