Setup was unable to create a new partition

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I'm trying to install a brand new windows 7 using Rufus on my old 1tb hdd but that message occurred. I thought that maybe it was the age of the hdd that was causing problems so I bought a new 500gb hdd seagate and the same message appeared. I tried optimize the hdd and making the USB read only but it still isn't working. The thing is, I have no problem installing windows 8.1 but I'm having GPU spikes when playing dota 2 and the cannot display this video mode message, so I thought I would try install windows 7.
 

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Windows 7 USB device doesn't work. It says files copied successfully, however we were unable to run bootsect to make the USB device bootable. And I don't have the disk, I got a product key and downloaded windows 7 iso
 

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I found this: Link
and the op said at the end:
I finally got it working by using "Diskpart" command from install DVD. First, I used gparted and deleted and created partitions but got same error. I used Diskpart command and made my partition active for install. I still had same error till I removed all drives including USB and rebooted PC and setup was able to install. Thanks guys.
I'm not sure what he meant by removing the usb then rebooting the pc. If he removed the usb then how did he get to the setup screen?
 
Dunno - there's no context to read that quote into.

Try to avoid anything other than just Windows. There's heaps of threads here with problems caused. Mainly because of the hidden fine print.

I'd just check the usb was ok eg minitools, re-download the iso image onto the usb stick and check it was ok again. Make the usb the boot drive and start the pc with the usb inserted.