CD version is harder to troubleshoot, for me. If it was steam, I'd tell you to do this:
Going back to the start menu page sounds like there's something buggered up in the configuration, possibly in the vanilla installation. I'd delete the modded folder, restore the vanilla british_isles directory to where it was before being modded, verify your game cache via steam, and proceed from there.
On the CD version, I think it's more likely your version is buggered up.
I'd say to backup your game saves and mods, reinstall medieval 2, and then find / install a patch to make medieval 2 be in the 1.05 era (if you didn't do that yet). In particular,
this patch (picked from the list
here) installed to make your game updated along the same lines as the rest of us. Then, do the standard installation process for the mod, and the game should work normally.