Server 2012 Essentials backup recovery issues (critical)

A client's Windows 2012 Essentials Server was recently was hit by a hard disk failure.  Thankfully I did a complete system state/file/baremetal (every option) to an external USB drive the day before the disk failure.

I tried doing a baremetal restore using the Windows Server 2012 Essentials installation DVD and selecting the USB external hard drive but the system kept responding that the backup location specified does not contain any backup.    

I went through many steps and suggestions but nothing worked.  I then just installed Windows Server 2012 Essentials using a the DVD and after the installation I tried running a restore using Windows Server backup and selecting the USB drive.  Same thing happened as before.

I have tried copying the WindowsImageBackup folder to the C: of the server and select the folder that way but no matter what I do the same message occurs.

The user I am logged in as is an Admin and is also part of the Backup Operators group.  The copied WindowsImageBackup folder on the C: has "everyone" set to full rights for folder, subfolder and files.  The owner has been set to the Admin user and the system.  Neither changes anything.

I NEED to get this backup working and restore the data.