So, I don't know what exactly how I managed to delete the MBR record on windows partition. But let me explain what I did next, I ran the ubuntu boot repair tool and now Windows is not even listed in my grub loader.
So I went and booted with windows cd and choose repair. Then I ran ubuntu boot repair again via live cd. Here is the log http://paste.ubuntu.com/1426181/. Still no luck.
Looks like osprobe can't detect windows on my /dev/sda2 partition. Any clues ?
Here is how my partitions look like:
Disk /dev/sda: 500.1 GB, 500107862016 bytes 255 heads, 63 sectors/track, 60801 cylinders, total 976773168 sectors Units = sectors of 1 * 512 = 512 bytes Sector size (logical/physical): 512 bytes / 512 bytes I/O size (minimum/optimal): 512 bytes / 512 bytes Disk identifier: 0x525400d1 Device Boot Start End Blocks Id System /dev/sda1 * 2048 206847 102400 7 HPFS/NTFS/exFAT /dev/sda2 206848 509620669 254706911 7 HPFS/NTFS/exFAT /dev/sda3 509622270 976773119 233575425 5 Extended /dev/sda5 509622272 957757439 224067584 83 Linux /dev/sda6 957759488 976773119 9506816 82 Linux swap / Solaris