The following thread may help you, Section 3 "Boot Win7 VHD Image file from USB":
http://www.911cd.net/forums//index.php?showtopic=23553
It seems that you need to fix the registry in Win7 in your live CD in order for it to work from USB (step 14).
Topic: Easy2Boot
Date 09/12/2014
By Starla
Subject Re: Pb with Windows 7 Live CD
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