I tried doing what you said with no luck, exactly the same thing happens.
I did what i now have to do every time i start my computer which is enter the setup and restore system defaults and my aim was to see if i did this with both drives in if it would then work, however doing this comes up with this message:
disk read error occured
press ctl. alt. del. to restart
and the only way to get past it is to turn off my computer and unplug the new hard drive and start over again.
I am less worried about my new hard drive as i am with my old hard drive now, because the "operating system not found" message comes up everytime i load my computer.
Please help
