“Using the Recovery Partition:

1.Press [F9] during bootup.
2.Press [Enter] to select Windows Setup [EMS Enabled].
3.Select the language you want to recover and click Next.
4.Read the ASUS Preload Wizard messages and click Next.
5.Select a partition option and click Next.

Partition options:
Recover Windows to first partition only.
This option deletes only the first partition and allows you to keep other
partitions, and to create a new system partition as drive “C”.

Recover Windows to entire HD.
This option deletes all partitions from your hard disk drive and creates
a new system partition as drive “C”.”

If the proper F9 menu options aren’t available, it’s possible the Recovery Partition was somehow deleted. Did you confirm that the partition exists?

First the 100% CPU spikes are absolutely NORMAL while playing a game and are NOT causing your video issues.
Second your Power Supply IS most likely causing the problem here. More exactly, your video card is being starved for current JUST when it needs it the most (while gaming). On the surface 500Watt SHOULD be enough for your video card, though possibly JUST enough, BUT the Quality, Efficiency, and MOST importantly, the Distribution of the power, may not be up to the task. MANY power supplies use multiple 12 Volt rails rather than a single one. Many cheaper power supplies list their Maximum Peak wattage when the Maximum Sustained Wattage is much more important for gaming since you often need to maintain the high current draw for long periods of time so your maximum sustained Wattage is only about 80% of your peak wattage. Then there is the problem of many cheaper power supplies push their amperage up on the 5Volt and 3.3Volt rails which you will never use but inflate the overall wattage numbers. Then the overall efficiency of the power supply if it is low enough can reduce the output below what you think you are getting.
List your Amperage on your 12Volt rails.
List your Power supplies make and model number so we can look up other information on it.
So we can be absolutely sure.
Look for power supplies that have a single 12Volt rail, is a quality name brand, is certified 80% efficient or better, has active PFC, and has about 20% more power than you expect to need.