I had the exact same issue. I could not even see my ISO files, it was like they vanished. I only could find them by disabling the iso mounting application in device manager and also setting explorer to show ALL files including hidden OS files.
They I found a bunch of ISOs taking up a ton of space.
I'd love to disable that win 7 feature.
Can you let me know also how to disable this. I can't find any info on the web on how to do this.