I'm confused about where we are - the not enough space message is from the original firmware?
Did you get it mounted as a drive over USB?
Where do we stand on RB and OF boot process?
I would definitely start by trying to get it mounted as a drive, before messing with booting either RB or OF.
From the messages, it looks as though maybe the USB drive issue is with your _windows_ setup...
From which point, various things can be tried, starting by looking at what shows up in the lower-level disks view.
Personally, I'm a Linux user... and when I do use Windows, it is usually XP... on XP, there is "start"=>"settings"=>"control panel"=>"administrative tools"=>"Computer Management"=>"storage"=>"Disk Management" to get to the starting point of what I'm talking about. What do you see there? (in whatever equivalent Win-7 has...) when you are going into USB mode?
You _should_ see that there is a disk, with a FAT filesystem, but not a partition table, and some options for the filesystem, including mounting it / operating on it.