What in the world... I'm speechless lol. I'd try wiping your system, then reinstalling the 1024 zip again, don't forget to reflash gapps as you will have just deleted your system and gapps was located there so you will have to put it back by flashing gapps. Try wiping dalvik cache and cache after you install gapps then reboot
Are you on the correct kernel? What does it say besides error 7? You have to come from the Official 4.6.8 Gingerbread from Motorola
If you do have the correct setup, it's probably because of the newer clockworkmod. I've had nothing but problems with the new clockwork which is why I never updated it once I did it by accident. I'm not entirely sure how to get back to the older clockwork version either.. is it in Rom Manager?