Fresh Windows 7 install, delete key is not working on MULTIPLE KEYBOARDS?

We purchased a machine for a user and it came pre-configured with Windows 8. She requested Windows 7 be installed instead, so I formatted the hard drive and used an install disk I burned using a disc image I downloaded from Microsoft's content hosting (digitalriver). I have used this image plenty of times with no issue.

EVERYTHING went well including the reinstall of all of the proper drivers and joining to our domain, and the computer does not have any other issues, except for the one I am about to describe.

The delete key does not work. I tried multiple BRAND NEW keyboards and multiple USB ports. I read something about toggling Num Lk but this did not help me.

I have deleted all keyboard drivers from device manager, and even after a reboot and verifying that Windows grabbed the generic driver, the issue persists.

I tried installing the drivers from the manufacturer website for both a brand new Dell and a brand new Lenovo keyboard. No luck.

Now here is the strange part: the delete key works perfectly fine ONLY when logging into Windows or during a user account control log in prompt.

Any suggestions?