I've used Express Scribe Transcription Software to transcribe audio notes previously.
- Free for non-commercial home use
- Supports Windows 8 (though I've only tested Win7)
- Supported audio formats: MP3, WAV, WMA, AIFF, MP2, VOX
You can define global hot-key's within the application, allowing you to start, stop, rewind, +/- 5 secs, speed up/slow down playback etc. without leaving the text editor you're typing the notes into. After finishing transcribing a recording, you can also mark it as 'Done' to remove it from the list of dictations to organise your workflow a bit.
I'm not sure if it matches your 'play pause rewind'-cycle requirement, but may be a good fit for your needs.
You could achieve 'play pause rewind'-cycle functionality with the above application if you used a macro scripting language like autohotkey to automate the required key presses. I was interested in it myself so I've written such a script and you can use it if you like. It's available on GitHub here:
Naturally it's not ideal to run two programs, but this does work :)