Then it must be a damaged hard drive
That's the only other thing it could be... But, for safety, try using some other spare/old hard drive from another computer before you buy a brand new one. Of course, it might not boot up the same (or at all), but if it shows the same error, then it's actually not the hard drive. However, if it gets past the "Boot from CD:" portion just fine, then it's safe to say that it is just the hard drive. That spare/old hard drive that you tried will need to be reformatted if you want it to work correctly inside your primary computer.
Again, good luck mate!