Yes, it is empty
Stupid Microsoft.
I just thought maybe there were clues as to what's going wrong in the CBS log or the DISM logs I posted in my first post. I have no idea why it's not working with the esd file.....it should not be failing with that 
Also, maybe if i could get SFCFix working maybe that would help....but it's not working for me, missing a DLL...I'm not sure if it's made to run from USB booted environment