I seem to at least for now fixed the problematic account issue. For me, the solution was to delete all account settings, both IW default and Cool Viewers. Open the default IW viewer, put on some new created clothes and edit them, save.
Exit from the main menu and then login again with Cool Viewer. First the avatar was ghosted but I got a notification that my outfit.xml was missing and to re wear my outfit. That solved it for me, for now at least.
Perhaps or most likely it was my own fault since I deleted the current outfit folder yesterday, I read a post about this in the IW forums and wasnt aware it could be part of the issue.
Hopefully this can be of help to someone
Also check here:
http://inworldz.com/forums/viewtopic.php?f=6&t=16972&p=143273#p143273