On June 14th, Microsoft finally conceded that there is no fix expect to lower the security settings. I can either change the default setting to Medium or Enable five settings, which for all intents and purposes is the same as changing the security to Medium.
Here's the response attempting to describe why it's okay that Microsoft has impeded IE into Project:
There is a reason we don'’t expose that functionality in IE by default. It used to be there in Windows 2000 Server and Pro, but it serves little purpose, provides no protection against the outside world, and generally only breaks things. Worse, since its set on a per user level, it doesn'’t prevent OTHER users or the system security context from running something '‘bad'’ on the local machine, only the logged in user.The function being referred to is the Security for the My Computer domain. To expose that function, you have to make a change in the Registry. To avoid breaking things, Microsoft set it to High and then hid it from the users. This is supposed to protect the user from ActiveX code running locally among other things -- the same thing that caused HTML code on CDs to quit executing. So I had exposed it myself in troubleshooting why local CD code would no longer execute. My point here is the same as my original post: Microsoft integrated IE into Project, and then when they changed the default security settings, it broke their own application -- an application that they charge $600 for.
By modifying this, we are disabling core OS functionality, and Project uses IE. We do not test Project in this kind of environment. We can log it as a bug, maybe in the future they will sign those controls, so they can work in this environment, and that'’s about as far as we can go. Also, I confirmed that we are not intended or supposed to work with High Security.
On to the second paragraph, if we are diabling core OS functionality, then Microsoft still has the the IE browser integrated to the OS. I had asked in a conversation whether I could remove IE and use Proejct. I was told that I could, but the same features would not work as I was trying to get working. And yet again, here's another example of poor QA from Microsoft.