Progress...
I ran multifail from a VM and selected the Rollback IOUSBFamily.kext
I was able to install Lion no problem as this fixed my mouse and keyboard issue from above.
I boot into Lion via the Hard Drive, and my FN USB issue is back.
Going to hook the drive up so my VM can see it and run multifail on it just like it did for the install...
As always, if anybody know's a better way to fix this... lemme know.
I with there was a rescue disk that allowed you to run multifail off of it (I know, different creator)... This would solve many issues.
myHack rocks btw... I am loving how convenient it makes things... I fear I do not fully understand all of the extras it installs automatically.
Great work!