|Internal damage, most likely to the hard drive. New drive may be required.|
First you need to test the hard drive to see if it has failed.
You can do that yourself using diagnostic software available free from the drive manufacturer. The links are here: http://www.tacktech.com/display.cfm...
You need to download the DOS version, not the Windows version because of the current problem of Windows not working properly.
The DOS version is in the form of an ISO file which has to be burned to a CD.
Then boot the faulty PC from that CD and the testing application will appear on screen. Run the "Long Test". If it says "failed", then indeed the drive needs replacing with a new one.