okay, update for future googlers:
I ripped the case to pieces as its glued and I dont need it nor I want to spend hours to deattach it with some crazy tiny screws. Took the hard drive out of it, connected internally to pc. After that Windows 7 would not boot, just stuck at windows logo screen.
So what I did, I tried hdd regenerate boot cd - didnt help, tried partition wizard boot cd - that would not start at all throwing errors, total rubbish.
After that I tried seagate's seatools boot cd. The reason I didnt try it first is because when hard drive was connected via usb in its original case - seatools couldnt see it.
Started testing the disk, long test showed > 100 errors. Apparently it fixed them and I thought oh yeah now I will boot fine. Nope, same stuck windows boot logo screen. And at last, via seagate's boot cd again I FULL ERASE the disk. It took 3,5 hours to complete. And voilà! I have a the disk now: