|OK here's the deal.|
Your option 4 was a mistake. You cannot transplant XP on a harddrive from one computer into a different computer.
You have an XP install disk and a valid key for it but it failed to load up on a new 1tb drive.
It's almost a certainty your XP disk is an older one without any integrated servicepacks and the reason it failed install was it cannot handle larger than 137gb drives.
Your way forward requires you to create a new XP install disk with SP3 integrated.
Google slipstreaming to find out how.
Once you have a slipstreamed install disk you will be able to install XP on the large drive.
Your other alternative is to try a repair install on your transplanted drive.
This will only work if the XP CD you have is the same version as the XP Pro that is already on that drive and has same or more recent servicepack integrated.
If your CD is XP Home then you cannot do a repair install.
Goin' Fishin' (Some day)