OS X version 10.9 Bootcamp - cannot format partition

I can clearly see that this is an issue that several people have already run into, however I STILL cannot figure out how to get past this road block. I will start from the beginning.

I have a MacBook Pro OS X 10.9. I purchased and downloaded Windows 8.1 from the Windows store. In addition to the Windows 8.1 download, I was given the Windows 7 Home Premium Upgrade download. I downloaded the 64 bit .iso file.

Using Bootcamp Assistant, I initiated all the options: I downloaded the .iso file to my thumb drive (8gb SanDisk Cruzer), downloaded the Windows support files and install Windows 7. I was asked to partition the disk as I desired and after the disk was partitioned, the system booted up the Windows setup. Awesome.

I was asked what language I preferred, what version of Windows I was installing and to accept the license agreement. Then I get the "choose where you want to install Windows" window. There are 4 partitions. The fourth partition is named BOOTCAMP. I highlight that partition. I then click "drive options (advanced)".

Here is where I run into an issue I haven't heard anyone describe. If I highlight any of the other partitions, the format icon that looks like a little eraser, if you will, is colored a light gray and appears to be active. Unfortunately when I highlight the BOOTCAMP partition, that icon is shrunk and red like it is not an option to choose.

If I click it anyway, it gives me a caution message about possibly losing information. I have the options of pressing "ok" or "cancel". I am never given the option to choose which format. If I go ahead anyway and press ok, it appears as though windows is moving forward with installation but it never moves past expanding Windows files... I'm stumped!

I have already spent hours on the phone with Apple Support... what am I missing?!