Same thing happened to me, and followed the exact steps you mentioned with the same results, so I guess I am forced to update to iOS 8.
Hi Joel,
My experience with apple is not a happy one but I have tried to install both IPSW files and then I tried re-imaging our iPads with the "edit Custom IOS versions" enabled and pointed them to the files to lock in the IOS 7 version ...the iPads updated to
IOS 8. Thanks Apple for making things easy! Good luck, let us know what happens.
Megan