*.LNK file extension

I received a customer complaint about their computer would no longer run any of the installed programs.
(Pen 233, 64 mb RAM, 4 GB HD, Windows 95B), True enough all icons on desktop displayed a file ending of *.LNK. Further analysis showed that allfiles on the hard drive ended in (.LNK).

I attempted to install windows over the present copy with no better results. Computer still boot completely but will not run anything.
What should I do short of formatting HD?