Need help finding a backup solution.

You are right about Time Machine. While you can encrypt it, you can't boot from it (encrypted or not).

It is possible to create an encrypted AND bootable backup with Superduper using these steps:

http://aproudlove.squarespace.com/blog/2011/7/28/how-to-boot-from-an-encrypted-external-volume.html

I tried it myself and it works.

 

SuperDuper! and CarbonCopyCloner (version 3.4.7 is still free and available for download here and works with Mac OS X 10.6 Snow Leopard, Mac OS X 10.7 Lion and OS X 10.8 Mountain Lion) are the only options out of the ones listed able to create a bootable backup, Time Machine backups are not bootable.

A further simple www search revealed, that CCC does support encrypted backups since Mac OS X 10.7 Lion (link) and SD can be used with an encrypted disk too (link).