Did you try fake fullscreen? That would have the game scaled to fill the screen without changing the resolution.
Check for updated graphics drivers, and Windows updates in general (especially anything DirectX related).
Try browsing to the '..\SteamApps\common\Dragon Commander\Shipping' folder, right click the DCApp.exe program file, select Properties and switch to the Compatibility tab: check off the options to run as administrator and disable display scaling on high DPI settings, and maybe try different compatibility modes, to see if that will avoid the freeze in fullscreen display mode.
This is a little random, but you can try the
4GB Patch to increase the amount of virtual memory that the game (or any 32 bit application) can access in 64 bit versions of Windows, to see if that make a difference.
