The original error messages in your first post mean that the PC is trying to boot from three different places (1) the CD (2) the network drive and (3) the hard disk. 1 and 2 won't work and 3 is damaged. If the restore files are on the hard disk and the hard disk is damaged we've arrived at a 'chicken & egg' impasse. Any chance you can borrow a Windows XP CD and try the install with that? If it works you can use your own Windows key (the one on a sticker on the PC) when asked to put it in.
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Do you know that we're all in line for succession to the throne? Really?
Well, if forty-eight million, two hundred thousand, seven hundred and one people died I'd be Queen.