Flash via Serial or OTA fails but OK via DFU

I just checked and you can forget that comment about v5. I get the same version with my device running 0.8.0-rc.2 for system and application and 0.8.0-rc.1 bootloader (no rc.2 available).

This is my output

PS C:\Particle\Photon> particle serial inspect
Platform: 6 - Photon
Modules
  Bootloader module #0 - version 200, main location, 16384 bytes max size
    Integrity: PASS
    Address Range: PASS
    Platform: PASS
    Dependencies: PASS
  System module #1 - version 301, main location, 262144 bytes max size
    Integrity: PASS
    Address Range: PASS
    Platform: PASS
    Dependencies: PASS
      System module #2 - version 204
  System module #2 - version 301, main location, 262144 bytes max size
    Integrity: PASS
    Address Range: PASS
    Platform: PASS
    Dependencies: PASS
      System module #1 - version 301
      Bootloader module #0 - version 101
  User module #1 - version 5, main location, 131072 bytes max size
    UUID: A0EBA9C53D14AFEF5EA6BE4ECE11DEC775FA80938B959499F70E323C5AF702B3
    Integrity: PASS
    Address Range: PASS
    Platform: PASS
    Dependencies: PASS
      System module #2 - version 301
  empty - factory location, 131072 bytes max size

And I can confirm that OTA still works.

But with Windows 7 I’d recommend you remove the serial drivers from the system (even for non-present devices) and reinstall the most recent drivers (not the ones in the linked post)
https://github.com/particle-iot/windows-device-drivers/releases/download/v6.1.0.51/particle_drivers_6.1.0.51.exe

Also flash a really minimal app firmware to avoid any trouble from that side
e.g.

void setup() {
  pinMode(D7, OUTPUT);
}

void loop() {
  digitalWrite(D7, (millis() >> 2) & 0x88);
}

BTW, do you call USBSerial1.begin() in STARTUP() or in setup()?

I also had some problem with USBSerial1 activated where it killed the default Serial connection. But that too was a driver problem as both drivers requested the same COM port, once I uninstalled the device-port relation and let Windows assign the ports anew, I got two seperate ports for the two interfaces which worked as expected.