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Lutheran doctrine also emphatically states that God is all powerful and all knowing.

Once again, rationally, this violates “Free Will.”

If God is my creator, but God also knows everything I will do or believe in my life, then God knows whether or not my soul will go to Hell - BEFORE he creates me.

Ouch!

A God that willfully creates souls he knows will spend all eternity in Hell?

That’s not rational.

It would be more correct to state that Lutheran doctrine denies a place to Luther's definition of "free will." You don't have to go any farther than his "On the Bondage of the Will" to realize that in the vision of the world created by Luther and later by Luther-on-steroids John Calvin (both devotees of Augustine) there is no place either for free will or reason and rationality. There is only will, God's will and nothing else.

Question: is the thing that God executed, according to Luther, the free will of the individual, or predermination [sic] to hell? If you could indicate from these verses, I would be grateful.

The thing that God executed, according to Luther in the selection I quoted, is every single thing that has, does, or ever will exist. In the selection I quoted earlier from The Bondage of the Will, written when Calvin was a young teen, Luther declared:
1. that there was no will but God’s will

…by this thunderbolt, Freewill is struck to the earth and completely ground to powder….

2. that the appearance of contingency is an illusion

…all which we do, and all which happens, although it seem to happen mutably and contingently, does in reality happen necessarily and unalterably, insofar as respects the will of God. [emphasis added]

3. that everything in creation that happens involving man or apart from man is a product of God’s will

Hence it irresistibly follows, that all which we do [everything in which man has a part], and all which happens… [everything else in creation] does in reality happen necessarily and unalterably, insofar as respects the will of God.

4. that God is not limited either in will or in knowledge

If God does not foreknow all events absolutely, there must be defect either in his will, or in his knowledge ; what happens must either be against his will, or beside his knowledge

5. that everything that has happened since creation and that God is executing now in creation is identical with what God had planned since before the beginning of creation and had yet to execute at the time of creation

But the truth is, what he willed in past eternity, he wills now; the thing now executed is what he has intended to execute from everlasting; for his will is eternal: just as the thing which has now happened is what he saw in past eternity; because his knowledge is eternal.
This is iron-hard determinism that substantively is no different than what Calvin, then 14, would later develop with bigger tail fins, and massive chrome bumpers and grills. Luther's appeal to theological determinism probably had more to do with his polemical needs at the moment in his battle with Erasmus. I’m sure that later, upon reflection, Luther probably thought something along these lines:
“Oh, crap. This makes everything in human existence and even in scripture that appears to depend on contingency, or choice, a complete illusion within a totally deterministic universe where even my thoughts about illusion, determinism, and choice are determined, and even worse than that because what would have been the point of it all to begin with? For God’s praise and glory? Praise and glory from whom? From some sort of intra-trinitarian blackslapping? Or from automata who, like the cuckoo popping out of the clock on the hour, say “Praise and glory. Praise and glory” with no more awareness or understanding or will than the wooden cuckoo has of clock-making and timekeeping?”

Both guys devised a theology that they wanted to believe protects God's holiness and righteousness but just ended up making God into an a-hole. Judging from the way they dealt with their adversaries, their theology was probably more an example of projection than it was anything else. Though it may be rational in some systems of thought to believe in God, that's not the case with Calvin or Luther.