I meant to look into this before and forgot about it.
There is a software switch inside flash drives that tells the computer if it's an external drive or removable disk.
This change came about because of Windows 8 certification (Windows2go requires it), once again you can thank MS for screwing over standardization.
As a result, some bootable drive creators no longer work and Windows 7 and earlier systems will not take notice of the drives removal, which is why I was getting phantom drives for a while (I have a ton of thumbdrives). Some manufacturers offer a tool to flip the switch, others have had luck using various drive tools. Newer bootable drive tools work just fine without changing anything, however this doesn't fix the phantom drive.
I think I managed to remove that whole system by formatting with a Linux format, which removed that special setting, then reformatting with Win7 to NTFS or Fat32, however I can't confirm that until I find out which of my drives are still formatted that way, and like I said, I have a lot of drives.