Ok so i worked out why this wasn't working. I hadn't followed it fully and renamed one of the arrays from PreUSBBootSupportedModels to USBBootSupportedModels.
Did this and i now have the 3rd option in bootcamp assistant "Create a Windows 7 install disk"
Did this and then followed the process through, got to the bit about partitioning the disk and it reported it couldn't partition the disk as there was an error and it required running disk util to fix. Rebooted, used cmd + r to boot into the recovery partition and tried running the disk tool. Didn't work as I had booted from the HD still and reported it couldn't unmount the drive.
So rebooted, booted back into OSX and created an OSX mountain lion USB recovery stick. Put that in, rebooted the mac, held down alt and now had a 3rd choice - boot into the USB stick. Did this and then managed to sucessfully repair the drive. Rebooted again and re-ran bootcamp. Bootcamp then ran through again, created the windows 7 flash drive, then partioned the drive. This ran through sucessfully this time and rebooted. It then attempted to boot into windows where it failed with:
No Bootable device - Insert boot disk and press any key. Tried pressing any key, and nothing. Its like its rebooted without any USB support. My USB wired keyboard is lit up, so I know it has power, but pressing any key makes no difference at all. It doesn't even clear the error and bring it back up again.
Now i know i can boot from this USB stick, as it booted from it when i turned it into a mountain lion recovery stick. So i guess any option of doing it from a USB stick is out as it looks like windows can't recognize the USB controller on my mac. Guess theres a reason that I didn't have that 3rd option.......
So I may give the external DVD drive option a go, just in case it does work. If it doesn't I think the only alternative is to get the Superdrive replaced, and cart my 27" imac to the local apple store. Which should be fun....