I may have missed it, but I don''t understand why if the HD and CD Drive are good, then you can't just do a complete windows reinstall with a format. You may need a second HD to install on and then you could save your data.
(Or use one of the backups that of course you have
. My pc's backup every night to a server and I can roll them back a day or a month till they last worked well
thanks to Windows Home Server)
(Or use one of the backups that of course you have