I have thankfully solved my problem. Basically it required re-installing Windows 8. To others who may see this here are the steps I followed:

STEP 1 - Recovery Media

Insert your recovery or installation disk. If you do not have the installation disk you may be able to download and create a disk from Microsoft. (This is for Windows 8 Pro only, you may be able to do this with other version, I do not know). This method does require a product key. My product key was in a confirmation email sent when I upgraded. Here are the steps to create recovery media.

• Go to this webpage (for US versions) and click install Windows 8. This will download a 5mb installer for Windows 8.
• Run the installer once downloaded.
• Enter product key from Microsoft when prompted.
• Click Next once entered. This will start the download of Windows 8. Note: It will look like you are going to install on the computer you are working on, however, you will be able to save to USB or disk after the download completes. This download can take a while depending on your connection speed. I suggest hanging Christmas lights while you wait. It worked for me.
• Once the download is finished, Windows will check the download.

• You will be presented with 3 options:

  Install Now
  Install by Creating Media
  Install Later from Your Desktop
  

• Choose Install by Creating Media Click Next.

• Follow instructions.
• Once the process finishes click Finish. You now have recovery media.

For more detailed instructions and screenshots see this website.

STEP 2 - Repair Boot Files

The first step in attempting to fix this issue is to attempt to repair the boot files. This did not work for me but may work for you.

• Start by booting the computer with the recovery media inserted. The computer should load the CD or USB. (You may have to change the BIOS boot order to boot the USB drive first.)
• Choose your language. Click Next
• You will now see Install in the center of your screen. On the lower left side you will see Repair your computer.
• Choose the repair option.

• You will have several options including:

  Refresh Your Computer
  Restore Your Computer
  Advanced Options
  

• Choose Advanced Options.
• Launch the command prompt

• Enter the following commands one at a time hitting Enter after each command.

  bootrec /scanos
  bootrec /rebuildbcd
  bootrec /fixmbr
  bootrec /fixboot
  

• Reboot computer after the final command finishes.

If you still see the error continue to step 3 & 4.

Other Options: There are other options within Windows Repair including going back to a Restore Point and Automatic Repair. You can try these options, however, they did not work for me.

STEP 3 - Attempt to Recover Files

At this point the above commands did not work for me. This left the option of re-installing Windows. However reinstalling Windows will erase certain files.

Recovering files BEFORE re-installing Windows

It may be possible recover the files to an external hard drive. To do this I created an USB drive that had a copy of Linux (Ubuntu to be exact). I used UNetbootin to create the Linux USB drive. For instructions on how this is done see the UNetbootin installation instructions. For some reason this method did not allow me to copy files (I kept receiving error messages). Hopefully this will allow you to save some files before re-installing Windows.

STEP 4 - Re-install Windows

!!!WARNING!!!! this step WILL ERASE your installed programs and will erase files that are saved in certain locations, IE: desktop, my documents, libraries, my music, etc. There may be a way to save these files before re-installing Windows. (See Above Step).

• Again boot the computer with the recovery media inserted.
• Choose Install
• You now have two options: Upgrade or Custom Install
• You can attempt Upgrade, however, it would not allow me to proceed. I chose Custom Install
• Follow instructions

Once your computer is up and running I would recommend checking your HD to see if it is failing. I have a Seagate HD and I am able to check my HD using SeaTools.

Please learn from me and keep a recent backup of your hard drive if at all possible. I do recommend cloning your hard drive (I use Clonezilla) as often as needed for your needs.

Please Note: I am not a computer expert and use the above advice at your own risk. The above process was figured out by a mix of reading advice via multiple forums across the Internet and finally speaking with Microsoft Tech Support. That call took two+ hours but would have been longer if I had not performed steps on my own quest for answers. Also note that MS tech support may cost money. I was informed at the beginning of my call that normally the call cost $99 (USD) but since my copy was less than 90 days old I had free support.)

Is the USB stick USB3? This error is encountered when you try to boot Windows 7/8 from a USB3 port because it does not have the drivers loaded to get past the part of the install where it prompts you to select the disk to install to. Are you SURE you have used a USB2 port as well? Do you have any devices hooked up to the USB bus at all other than the thumbdrive? I could see that causing issues during install as well.