Yes the "System Reserve" was included in the image.
Yes it was.
With Macrium Reflect v5 there is no way to verify the image until you get ready to restore it.
To make a long story shorter
, I went ahead and did a Clean install of Windows 7. It will probably take me a month to get all my software reinstalled, but it will not be the first time I have had to do this.
I just don't have any faith in this version of Macrium. I know that version 4 worked; I used it many times to restore images without any issues. I also know that Acronis works well (linux rescue disk work in v4). I will probably go back to using Acronis. Acronis is a little slower, but never failed me.
As far as I am concerned this problem is fixed.
Thanks for all the replies.