Thanks again to both of you for your help. I have already taken your advice and I will be implementing a better backup solution for our Mac users in the department. They will continue to use Time Machine as an added layer of protection, but it looks like we will be using Carbon Copy Cloner along with the CrashPlan Pro service to make sure our staff is protected from these types of failures in the future.
As for my problem, it took a few days due to the large amount of data on the external hard drive that was being used with Time Machine (around 1TB), but it is finally resolved. I used Data Rescue 3 to recover files from the external hard drive using the "Deep Scan" option in Data Rescue 3. The process took about 7 hours to complete using two thunderbolt connected hard drives (The external drive I was trying to recover and a second one as the target for the recovery).
After the first 7 hours, a ton of files were recovered, but as you know, there was not much to go on. I could tell where the documents were, but they were no longer named as before and it was basically a big mess. The Windows files were recovered to some degree at least through the process, but the user was going to have to go through thousands of files in order to find the files he most wanted.
I then noticed that Data Rescue 3 has the ability to learn what to search for by adding examples of non-typical files that I was looking for. At this point, I added examples of a few files that I had hopped to recover and fix the corrupted Fusion VM. I added the .vmdk, .vmx, and .vmwarevm files as examples. I then ran the "Deep Scan" recovery again with much better results. This time after the 7 plus hours, I was able to do a search for the .vmdk files and found 6 version of the 83 GB vmdk files that had been saved on the external drive using Time Machine over the period of about two weeks.
I got a little excited after seeing the files since I thought my problem had been solved. However, as I moved the recoverd vmdk files over to the Mac, none of the recovered files worked. Most would just tell me (when starting the VM) that the hard disk could not be found and to insert the Windows 7 CD and run a repair. A couple of the recovered .vmkd files acted like they might actually boot, but then crashed.
I was about to give up, but decided to run the Data Rescue 3 recovery one more time. This time, it once again recovered the same 6 versions of the VM files as before. However, as I looked closer in the .vmwarevm package I noticed that one of the recovered vmdk files did not have a big red circle by it. I transferred this .vmwarevm file over to the computer from the external drive and added the vmdk file inside the package to the virtual machine library in Fusion on the Mac. I didn't have much hope at this point, but I started it up and after a few anxious moments, the VM booted up and I was able to log into Windows.
All of his files were there from the day before his system crashed. I quickly connected an external hard drive to the VM and pulled off all of the data he was hoping to recover just to be safe. After the data was safe on an external hard drive (I kept thinking it would crash at any time, so I was glad to get everything he needed off), I ran a repair on the VMware Tools and allowed Windows update to bring Windows 7 up to date. Once this was done, I have since been rebooting a lot and using the VM like normal with no issues at all. It was literally a miracle that it came back up. Later tonight I will be running Carbon Copy Cloner on it just to be safe along with staring a new Time Machine backup while I get the CrashPlan Pro service set up.
Sorry for the long post, but I thought someone might find this usefull since it actually did work for me.