I updated the BIOS to F13 but not U1b. Update went fine and recognizes Ivy Bridge CPU mentioned in the title of this post now. So, I am back to the original CPU. However, there are some minor errors when I enter BIOS after POST, indicating that there were failed boots. I think it is still picking up old settings.
So anyone who comes here searching for similar error with this board, you probably want BIOS F13 with your Ivy Bridge CPU.
Anyway, installing Windows 7 as I type this post.
Thanks again for everyone and specifically Absic who chimed in.