It sounds like the hard drive may have failed, in which case you will have to replace it with a new one. To confirm hard drive failure you can test it with diagnostic software that loads from a bootable CD. The links are here: http://www.tacktech.com/display.cfm?ttid=287
You can make the CD from the downloaded ISO file with IMGBURN: http://www.filehippo.com/download_imgburn/
When you've made the CD, boot your faulty PC from it to test the hard drive.