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I know that there is a way to download and install Windows 7 onto a USB flash drive and then install 7 from said drive. Windows 8 Should have the same capability. However, unlike W7, W8 lacks a legitimate source to download the ISO necessary to clean install W8 from a USB flash drive. DigitalRiver.com lacks the ISO file for Windows 8 (ANY version). Yes, I have a Windows 8 COA with product key straight from Microsoft!

Any way to resolve this without needing to install Windows 8 from a DVD drive?

Try use the diskpart command to format and activate the partition on the USB disk, then just copying the contents on the DVD to the USB drive.

The Win7 USB install tool http://www.microsoftstore.com/store/msusa/html/pbPage.Help_Win7_usbdvd_dwnTool works fine for Win8. It's what I used to install from a TechNet ISO.

If you have the installation DVD, you can make your own ISO from it with various rip/burn/authoring utilities. It's the product key that determines what version of Win8 will be installed; the DVD contents are identical on most retail versions, including the Upgrade units. That's why they say "Anytime Upgrade/Add New Features" since the necessary files for the different versions are already on the media.

If you bought Windows 8 and you have a Windows 8 product key, you can download and install it from this page http://windows.microsoft.com/en-US/windows-8/upgrade-product-key-only