OK, I have an update regarding my situation.

I decided to check my Windows application event log after trying to create the rescue disk (USB or CD) and I had an event ID logged referencing a corrupted cab file (972214af…cab). The event ID was 11335 with a source of msiinstaller referencing the cab file. I did a search of my system and I found that cab file under \users\user-name\documents\AvastPEToolkit. I was unable to open that file so I deleted it and ran the rescue disk process again and it re-downloaded the file (downloading toolkit) and I was able to create a rescue disk.

Just for kicks I uninstalled Avast 2014 and discovered that directory was left behind so I was thinking that I got a corrupt download initially. Since the directory was left behind, that would explain why uninstalling and reinstalling avast didn’t fix my issue. NOW here is where it gets weird. I deleted that directory (AvastPEToolkit) since I had uninstalled Avast 2014 and then I installed Avast again. Next I went to create a rescue disk and the process seemed to work fine BUT it didn’t recreate that directory I had deleted. Now I have never had any version of Avast installed on my system prior to the 2014 so it shouldn’t be something left over from a previous install. So it would seem that the corrupt cab file I had in that directory was causing my problem but I can’t explain why it never came back after I removed Avast and that directory since I assume Avast put it there in the first place.

So at this point I quit focusing on that directory and I burned the rescue.iso to a CD and I was able to successfully boot to it just fine. Unfortunately, a USB flash drive never booted; all I got was missing operating system. I formatted the key as FAT32 and NTFS (plus quick and full formats) but it never would boot. I then saw some posts that other people had the same problem and one person was suspecting a corrupt boot sector. I then used EaseUS Partition Master Home Edition to rebuild the MBR on the flash drive (I told it to rebuild as Windows 7) and then the flash drive worked!

Anyhow, I wanted to pass along what I had found so far and hopefully it will help someone else.