I have some good news, I resolved the issue. However I tried three things at once and now it's fixed so it could be any of the three. I installed Sandra Lite and did a drive bench mark which came back negative (drive was to fragmented) even though every defrag tool said the drive was ok (only 1% fragmented). However I decided to try other defrag tools and I ended up using O&O defrag. I selected their "defrag by most accessed" mode and left it running at night. I couldn't tell you what it did since I woke up in the morning to find my computer restarted and with an error in post screen with Primary drive showing crazy characters, I was thinking uh-oh I toasted the drive. But then I re-added it to bios and started again, however still slow as molasses and worse than before. It was taking over ten minutes to load and I didn't let it finished because it wasn't halfway done (the task bar only loaded) and the HD light was going and going.
At this time I am thinking my drive is toast so I better start setting up a new OS install on a second drive I have on the system and move the files over just in case the current one decides to go. I did the install of Windows 2K and it was working great but when I wanted to access the C drive it was slow getting still. At this time I am thinking I am in trouble because I might not even be able to transfers files out from this ridiculously slow drive but I continued with all the windows updates (at least SP4) of the new OS install. After I restarted my system from SP4 on the second drive and tried to transfer file again, this time C drive was working much faster to transfer files out and I thought this is ok for now and transferred some financial software directories. At that time my CPU fan arrived and I shut the system off to change the dreaded thing. Once this was done I decided to boot up into C (the original install) and see if it loaded properly and to my surprise it did. I should add that when troubleshooting I changed the swap file to drive D but when I did the new install on that one and tried to boot into C again I receive the error by Windows about setting up a swap file but the first time it when it was working extremely slow. However on this second boot I received the same message but the system loaded like it used to, fast! I created a swap file and everything has been working well since.
Why did it do it to begin with? I am not sure. But I do know that changing the CPU fan, doing one final defrag, and deleting and recreating the swap file did the trick. In your case I would lean more towards it being a cpu fan issue and a physical HD issue, since CD restore usually repartitions and formats a HD which would wipe out it being a defrag, swap file or any other software issue. In summary I would suggest trying Sandra Lite (google it) test your the system and examine the possibilities of being a hardware issue.