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OK, I figured it out. Finally.
Well even though the W7 USB/DVD download tool says it failed to make the USB bootable, (see first attachment in 1st post), it actually is.
My mistake was not to notice that there were 2 boot device settings in the bios. Not only did I have to change the "First boot device" to removable, but also needed to change the "Hard disk boot priority" to USB.
Thanks for all the help trying to help me figure this out!
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