Windows 7 locks up during Backup & Restore

[EagleMan76]

Hi, I am having the issue where Windows 7 will completely lock up while doing a full image backup to another disk. This always happens ~75%-80%. This is a very recent installation of Win7.
Here is a list of what I tried so far:
I have tried different hard drives to backup to, both with more free space than the total of the drive being backed up.
I checked my settings and am indeed only backing up the C drive (1.28TiB) to an external drive (2.0TiB). On the C drive 200GB is occupied, rest is free space.
All drives have been defragmented already.
I removed AVG Free and installed Microsoft Security Essentials and restarted several times since.
I disabled the A/V, restarted, and tried again to no avail.

I restarted twice and retried after each step I took, nothing seems to work.

Does anybody know any other possibilities? I have it scheduled to backup an image once a week and it does automatically start, but never finishes. Could the fact that I am running a RAID 10 (4x WD 640 Blacks) have anything to do with it?
Any insights are greatly appreciated!

BTW: If you need more details on my system I have it all updated in the Specs section of my profile.

 

[EagleMan76]

Ok, it won't even run in Safe Mode due to the service not loading, I have using msconfig to load only Microsoft services and not autostart any programs. Still freezes at the same place.