Your demo folder is located within your PHdemo folder, to locate it, do this.
Right click GMOD in steam libary, head to manage>>>Browse local files>>> GMOD>>>Data>>phdemo.
Every time you play on perpheads, this demo folder is automatically filled with recordings from the last 21 days(or more if...
Your best bet would be to try every simple option to at least get the game working, as from what it seems, your PC is able to handle it. I reccomend you to try this and then see if it works before trying anything else that might be more complicated.
Have you tried to Verify your game files using steam libary? to do this, go to steam, right click go to properties, head to "Installed Files" and then click verify intergrity of installed files, this might solve your issue.
What branch of GMOD are they using? what server are they actually attempting to join? Does it happen with any other servers that they are attempting to join?
Can you give us more information?
Is your game ccrashing at Client info recieved? what is actually happening?
What specs are your friends running? are they strong enough to run PERP?