(no, this isn't the same as my previous one!)

A friend's HP PC "crashed", and when he tries to start it up again the following happens:
1) the memory checks happen OK
2) the rest of the POST seems to happen with no error messages (a hard drive is named as the primary boot device, and a CD drive as the secondary device)
3) the screen goes black
(after a few seconds) 4) the CD drive spins
5) the Num Lock, Caps Lock and Scroll Lock lights turn on
and then it goes back to the beginning.

He's tried the System Recovery, but when that starts up it gives the error "The section IDA_CREATE_USER_DRIVE_U does not contain a valid dialog template". It then appears to operate the hard drive (the light flashes) but after a while the computer reboots itself and goes through the same cycle again.

I think the problem's probably that the hard drive has somehow got disconnected, so that the PC's looking for its configuration files on the hard drive but can't find them, so starts the boot again in the hope of finding a hard drive next time.

Am I right, or has anyone got any other ideas?

You may have a bad sector
the Master Boot Record may be toast.
2 "quick" ideas
Reboot press F8 --last known good config
I'm not sure if HP discs allow repair install...but if they do that should work without data-loss.