Use your Linux system to save all of your user files on external storage as described here
Use Ubuntu Live CD to Backup Files from Your Dead Windows Computer - How-To Geek
then do the factory reset.
How come you have no restore points ? SP1 sets one immediately before starting the update. That would be the normal recovery route. Is there a shortage of space on your W7 drive ? Restore points are kept on a fifo queue keeping as many as you have space for (or have allowed space for - you can allocate more in Control Panel > System > Protection > Configure)