The minecraft bin/resources and server.jar are all clean and I followed your exact instructions and this is what I got.
================ Forge ModLoader Setup Start ===================
Setting up MCP
> Backing up commands.py
Patching file C:\Users\Eli's laptop\Desktop\personal mods\mcp\runtime\commands.p
y
patching file commands.py
Hunk #2 succeeded at 586 (offset 2 lines).
Hunk #4 succeeded at 1047 (offset 2 lines).
Hunk #6 succeeded at 1077 (offset 2 lines).
Hunk #8 succeeded at 1247 (offset 2 lines).
Hunk #10 succeeded at 1350 (offset 2 lines).
Hunk #12 succeeded at 1451 (offset 2 lines).
Hunk #14 succeeded at 1627 (offset 2 lines).
Commands patch applied successfully
Copying FML conf
Fixing MCP Workspace
Downloaded argo-2.25.jar successfully
Downloaded guava-12.0.1.jar successfully
Downloaded guava-12.0.1-sources.jar successfully
Downloaded asm-all-4.0.jar successfully
Downloaded asm-all-4.0-source.jar successfully
== MCP 7.2 (data: 7.0a, client: 1.3.1, server: 1.3.1) ==
# found ff, ff patches, srgs, name csvs, doc csvs, param csvs, renumber csv, ast
yle, astyle config
> Creating Retroguard config files
Jar Check 0 jars\bin\minecraft.jar.backup jars\minecraft_server.jar.backup
== Decompiling client using fernflower ==
> Creating SRGs
> Applying Retroguard
Compiling AccessTransformer
Compiling MCPMerger
Running MCPMerder for 0
'"C:\Program Files\Java\jdk1.7.0_05\bin\java" -classpath "C:\Users\Eli's laptop\
Desktop\personal mods...' failed : 1
Decompile failed
Decompile Exception: 1
Press any key to continue . . .