The common theme in the 100's of posts with Windows 7 keyclone problems is there is always someone who posts they have Windows 7 and its working fine. Anyways I appreciate the reply but there are no answers in those threads although it was in reading one of those threads that lead me to thinking about what eventually fixed the problem.

I was able to replicate the problem pretty reliably by walking into OK instance and it would fail at the 1st boss encounter. So i just started messing with the variables and actually found a fix. All I did was limit the fps on all my windows maxfpsbk 10 & maxfps 30. Seems strange that this would fix the issue but I've been able to repeat the problem by removing the fps change and then fix it by putting the fps change back in play.

So the problem I was experiencing seems to be that the cpu was being overloaded? Anyway I'm just glad that I can continue using keyclone without issues.