is there a way to create a 7zip sfx with config.txt but with a password? I need it to ask for a password before it will proceed with the installation.

I know that would defeat the purpose of creating a unattended setup but I need this for something else.

This isn't a very elegant solution, but I suppose you could always wrap a password protected WinRAR SFX inside the 7-Zip installer. If you wan't to take advantage of 7-Zip's better compression, just make the WinRAR SFX use no compression (store).

Personally, I would just use WinRAR itself for such an installer.