A Mac machine needs to be reformatted with Lion. I backed up the Lion dmg file when I purchased it via the Mac App Store.

I now need to create a bootable USB drive from the DMG file but I need to be able to do it in Windows, preferring open source or at least free options.

How can I do this?

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You can use transmac to extract it then, all you need to do is make it bootable. acutesystems.com Its a 30-day trial. I'll try to find a tool to make it bootable. – Adam543i Jan 28 at 1:43
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Use TransMac. 15-day trial period and works flawlessly. Just did this yesterday. In the left pane, right click USB Drive >> Format Disk >> Format with Disk Image (see attached screenshot). Point to your .dmg file and click Open.

It will take a few minutes depending on size of .dmg and speed of USB drive, but once done you can pop it into your mac, hold down the option key when turning on the mac and choose the USB drive.

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