First off... if your having problems with windows in the first place... All you really have to do is use the live cd to replace the files on the HDD... Also when ever you start messing around with the system on the thumb drive, your gonna screw up the iso... if you want to make changes to the system, use the hdd, and link it... It will work the same way... Don't delete anything... With Ubuntu, it will screw up the iso, on those thumb drives, it runs straight from iso (or so it did as I remember). But if your gonna go through all this trouble to not just fix the windows... Why don't you use the Live cd, to copy your stuff from the hdd, to your external hdd... and then just install Ubuntu (though I would recommend using a better distro)...