Well there is one solution left and i know this will work cause it happened to me before
Re-download the mod (it may have gotten corrupted somehow whilst downloading) but do this after a format of your pc (preferably your windows drive only
). When installing FL make sure to restart after installation to have it work with no problems. Then install FLMM (think 1.3.1) and then install crossfire mod 1.7 to the flmm directory (it should detect it by default). Then after that, launch CF by clicking on the desktop Icon of FL, and let the Launcher download the necessary updates. If it still doesn't work then nothing else will work as this is how a clean installation works, 100% clean on every level.
P.S. also try installing the CF1.7a patch after the launcher is done if you still get wierd problems like connecting for example.