@dwmreg you need to change the keyboard region. This setting is found under the raspi-config menu.

@quicksilver Oh wow. Thank you! I wasn't sure what to search for but this fixed my problem. Specifically this post: https://retropie.org.uk/forum/topic/21568/dialog-boxes-contain-x-s-and-q-s-instead-of-shading/40

@jerryfudd It's a raspi-config configuration error. Modify the
/etc/systemd/system/getty@tty1.service.d/autologin.conf
file and replace its contents with

[Service] ExecStart= ExecStart=-/sbin/agetty --autologin pi --noclear %I $TERM

then restart your system.

I had this problem too...
for me it was the marquee file that was bad (Muppet Adventure - Chaos at the Carnival (USA).png)...

Not the entry in the gamelist.

Here is the replacement I made...
0_1497996234051_Muppet Adventure - Chaos at the Carnival (USA).png