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#31
That Recovery partition likely doesn't contain all of the files for Recovery (it's too small) but links to them on C, which link may have been broken if there has been a clean reinstall or major repair.
You can try marking it Active, reboot to try key again. Marking Active is what the key itself does in most cases with a Recov partition. Partition - Mark as Active (Method Two)
Are you using a crack or loader on Win7 as it may have messed up your boot?
If you have a valid license then you may need to find a Win7 installation DVD, follow these steps for Reinstalling Windows 7.