Ok for a summary here's where we're at (as I understand it).
Ron & Firedog have this working and found a 3rd registry entry that is different than mine (on my Windows 8 system).
The registry entry that they have that match is:
HKCU\Software\Microsoft\Windows\CurrentVersion\Explorer\FileExts.eml\UserChoice: Progid key shows
WindowsLiveMail.Email.1
On my Windows 8 system my entry is:
HKCU\Software\Microsoft\Windows\CurrentVersion\Explorer\FileExts.eml\UserChoice: Progid key shows
Applications\wlmail.exe
As a test I also have a 64 bit Windows Pro 7 system and it also matches Ron & Firedog's settings and is working AOK:
HKCU\Software\Microsoft\Windows\CurrentVersion\Explorer\FileExts.eml\UserChoice: Progid key shows
WindowsLiveMail.Email.1
However, there is still one difference I see between my Win 8 system and my Win 7 system under that same registry key. My Win 8 system also has this entry whereas my Win 7 system does not:
Hash key shows IT7K45eOnAU=

This entry is not on the Win 7 system.
Now the odd thing. I cannot edit the registry on the Win 8 system to change Applications\wlmail.exe to WindowsLiveMail.Email.1
I get this error message when just trying to change the value via Regedit (and Regedt32):

When trying to use the "import" function to insert the whole .eml key I get this error message:

Here's the .eml registry fragment I was importing (note the "Hash" value under
UserChoice that is on the Win 8 system but not on the Win 7 system (this might be meaningless)):

Yes, I was running RegEdit as "Administrator".
I also even tried booting the Win 8 system into Safe mode to try editing this section of the Registry with the same results as above as to access.
Maybe a clue forward but still a step back.... :)
I'd sure like to get this 3rd entry changed that Ron and Firedog have now identified to test this out...
Thanks again all for all your attention,
Jess