I was able to get it to install by backing up the original hangouts app then removing it from data/app then moved the modified one to system/app and changed permissions, then rebooted. The app worked but unfortunately mms isn't working, I haven't been able to receive mms messages they don't appear in hangouts or the default messaging app. I'm running NOS GPE.
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I did exactly this, and whenever I restart, hangouts isn't in my app drawer. Couldn't install or anything. When you move it to system/app and restart does it show up in your app drawer?