I have been searching for hours on the internet for a fix for this but I still cant found one.

My problem is that when I try to add the Output REV library to Kontakt it replies with "no library found" The folder that I selected has REV.nicnt on it so what is going on?

 

I can't use quick load to save the library either because it says "Your new library must be added before this instrument can be used"

 

Could be couple things.
From what I can tell from my experience with these things, first of all make sure you're using the latest Kontakt version and then place the nicnt and the nkr/nkc files in the same location (if there's any of them, sometimes those files may cause trouble if they are missing).
Other than that I don't remember having problems with that library. When you add it, make sure you are adding the folder that contains those files, I used to make silly mistakes about it and had the same error window just because I added the library by selecting the wrong folder.

 

Just found the solution. I just ran Kontakt standalone and ran it as admin.