Right Clicking a Folder /Properties / Customize /Change Icon: by default the path is displayed as %SystemRoot%\system32\SHELL32.dll

Can the default path be altered - in the registry or elsewhere - so that %SystemRoot%\system32\imageres.dll or some other default file is the new default?

This isn't a "default" path. When you choose to change the icon for anything, Windows will load the current library from which the current icon is from. So the reason why SHELL32.dll is always there for a folder is because the default folder icon is stored in SHELL32.dll. You would need to change the default folder icon (OS wide) to something that is in IMAGERES.DLL to get that library to show up when you go to change a folder's icon.

This isn't a "default" path. When you choose to change the icon for anything, Windows will load the current library from which the current icon is from. So the reason why SHELL32.dll is always there for a folder is because the default folder icon is stored in SHELL32.dll. You would need to change the default folder icon (OS wide) to something that is in IMAGERES.DLL to get that library to show up when you go to change a folder's icon.

If that is true why does the path still show SHELL32.dll even though I have changed the FOLDER icon to one that is in IMAGERES.DLL?

can you show a screenshot? the way you changed the icon for the folder - you only changed it for that folder. you didn't change it for ALL folders. as tripedicus mentioned, if you want to change it for all folders, you need to modify shell32.dll or use a third-party app.

OP is not crazy. After changing to a different ICON still get shell32.dll as the default.

Can someone else confirm on a non-vLited install and a x86 version. Mine is heavily thinned x64

If anybody wants to do some trial and error, have a look at these registry settings.

HKEY_CLASSES_ROOT\Directory\DefaultIcon

HKEY_CLASSES_ROOT\Folder\DefaultIcon

HKEY_CLASSES_ROOT\Folder\ShellNew\IconPath

They are all set to

%SystemRoot%\System32\shell32.dll,3

Have fun, I'm out, this sounds like more work than reward.

I'm interested in fixing this default icon browse location, too. It would save a whole lot of mouse clicks. I suspect in six years there's no solution but, ANYBODY, got a clue? 

In the Change Icon dialog, paste or type the desired location path (with trailing backslash) into the File name box before clicking on [Browse]. You can also paste or type the full path of an icon-containing file before clicking [OK].

Hint: The text you want to paste might be the target path located on the previous sheet/dialog before clicking [Change Icon].

Yeah I ended up doing something similar: creating a hotkey from my clip app to autopaste the path I want into the dialog windows. The problem with the suggestion above is that windows clears those file location crumbs when I reboot or weed out my registry. But thanks for the suggestion

Windows cannot possibly clear the target path / location of the folder! And it might help if you actually describe in detail what you are trying to do.... Is an extra service or background CBT app acceptable?