The following are the steps that I took to create the partition and how I made it work with my current installation. All of my files, applications and settings were not harmed during this process. If you do not have basic tech skills then please do not attempt this. I would recommend reading over all of the sections before starting. I hope this helps other people that are missing this partition.
First make sure that you are missing the partition. If you are not missing the "System Reserved" partition then this will not help you. Start by opening Control Panel and searching for "Administrative Tools" (search bar is on the top right corner). After opening Administrative Tools open "Computer Management" from the list. Once in Computer Management you will see "Storage" towards the bottom of the list. Click on "Disk Management" which is under "Storage". Wait for a few seconds while it searches for drives on your computer. When the drives appear, look for the drive where your Windows install resides. If you don't see a partition with a size of 100mb to 350mb or a partition named "System Reserved", then proceed with the following steps.
1. This process has a chance of erasing all of your data. Please make an image backup of your system before proceeding. It did not erase any of my data but there is a small chance that it can happen. Before you proceed please make sure that you have your Windows 8 CD or a Windows 8 Recovery CD with Repair Tools (This is required too boot your system in Section 4).
Now to start, you will have to make Unallocated space on the drive where you have Windows 8 installed. You can do this in the Disk Management tool. Right click on your C drive or whatever letter you have assigned to your Windows partition. Go to "Shrink Volume" and when the window appears go to the "Enter the amount of space to shrink in MB" field. Here you will have to decide how much space to give the System Reserved partition. I entered 500 because I might do some dual booting in the future and also because I wanted to play it safe. I would recommend you do 350mb, which is what Windows 8 usually makes it. Now click on "Shrink" and it will create "Unallocated" space to the right of your Windows partition.
We now have to create a new partition out of the Unallocated space and move this partition to the Left of the Windows partition. I tried doing this with Disk Management but all I could do was create the partition. Since there is no option to move it, you will have to obtain a partition manager with the ability to move partitions. I tried to do this with free software but I was unable to. I ended up buying Paragon Hard Disk Manager 12 Professional. I searched for coupons and found one for 20% off at RetailMeNot.
2. Using the Paragon Hard Disk Manager I selected the Unallocated space to the right of the Windows install partition. With this software, it's a little hard to find because it appears as a skinny oval box. Once you have it selected, go to the blue "Create Partition" option under the Unallocated space pie graph. This will bring up a window with an "Advanced Mode" option. Select the Advanced box and click on Next. Now on this screen you will have to click on the Green Arrow located on the left side of the "A new partition will be created where the marker is." text. Once you click on the arrow one time, you will see that it moved the little box to the Left of the Windows partition. Now click on Next. On this screen you will have to specify the size of the new partition. If you made the Unallocated space 350mb then you will enter 350 in the "New Volume" field and click on Next. Now you will have to to specify the "Partition Type" as NTFS and enter the words "System Reserved" in the "Volume Label" field. In the "Assign the following drive letter" you will have to select the scrollable box with the letter and at the very top select "None" and then click on Next.
This next screen informs you that no changes will be made until you hit the Green "Apply" check mark at the top left corner of the program. Click on Finish and when the window disappears, click on the Green check mark to apply the changes. At this point it will ask to restart the system in order to make the necessary changes. Do not turn off the system during this process. It took about 15 to 20 minutes on my system. Once it's done, it will restart and bring you to the Windows log in screen.
3. Once you are back to Windows, go back into the Windows Disk Management tool and check to see if you have a System Reserved partition to the left of your Windows partition. If you don't have it on the Left side then something was done wrong and you will have to delete what you created (right click on the partition and select "Delete Volume" or use the Paragon software to delete it) and start over. If you do see it on the Left side then you are ready to make the System Reserved partition Active.
In the Windows Disk Management tool, right click on the System Reserved partition and select "Mark Partition As Active". This will bring up warnings about it affecting the boot process of your system. Click on Yes and/or Continue for everything that pops up. Now you will have to insert your Windows 8 CD or any Windows 8 Recovery media you have created to access the Repair Tools. Restart your machine after you have inserted the CD.
4. You will have to configure your BIOS to boot from your CD drive because you will not be able to boot into Windows. Once you have booted using your Windows 8 CD you will have to click on Next and then click on "Repair your computer" on the bottom left of the window. On the next screen click "Troubleshoot" and then "Advanced Options".
Now click on "Command Prompt" and enter the following command without the quotations and hit enter: "bootrec /fixboot"
Now type exit and hit enter. You can now Restart your computer by pressing the restart button on your system or by going back to the first screen where the "Troubleshoot" option was located and selecting "Turn off your PC".
You will have to boot back into the Windows 8 CD and go back into the "Command Prompt" window. Enter the following command without quotations and hit enter: "bootrec /rebuildbcd"
Now Restart your computer again and boot using the Windows 8 CD.
This time you are going to click on "Automatic Repair" which is located in the Advanced Options section. You will see a screen asking you to select the Windows 8 install you want to repair. Click on the install you want to repair. This will start the repair process that will allow you to boot back into Windows 8. Once it's done, it should restart your system automatically and this time do not boot from your CD. Let it boot using the hard drive you have the Windows 8 install on.
If you did everything correctly then you should now be in Windows and you can now go to the store and start the Windows 8.1 upgrade. If you are not able to boot yet, then I would recommend going through all the steps in Section 4 again. If you are still not able to boot into Windows then restore the image backup you did. You can use the "System Image Recovery" option in the Repair Tools.
I would like to thank everyone that has posted their experiences on the Microsoft Answers forum. I have to say that I am beyond disappointed with the way Microsoft has handled this issue. This is not the way you guys are going to stay ahead of the competition. Step up and face the problem head on, do not hide or ignore it. We do not need another Apple company.
