I finally did it. After all this time, I got to a successful work-around for Halo 2 on Windows 7.
I read several googles on the issue and installed the game without
installing "Games for Windows Live"
After ignoring the option to play while it downloads- and instead chose to download everything first, I disconnected my Ethernet cable in hopes that the game won't somehow auto-update. Then I launched the game, still offline, and it worked! I can't believe it did! Exited the game, re-plugged my Ethernet cable, tried again, and again it works!