Sorry to hear you are having trouble.
1- If we install the program elsewhere then the default path, Deskscapes config GUI appears for a fraction of a second then disappears when called with desktop r-click | "Configure DeskScapes"...
Is this still the way you have DS installed - outside of the default path?
In either case, please purge DS:
If you create a new Windows Admin (<---- important) account, install DS in the proper / default location, do you still have the same issue with dream/backgrounds not showing in the DS UI for added folders where the proper file types exist?
If so, and you save this image as is, not edited or converted in any way, to a location in local/current user '\Documents':
And you click off your added location, then back, does it show?
Stardock Support Manager