HOLD IT!!! No one here is going to believe this-but if its a matter of the disk going bad and not simply incorrect installation-you could try putting the disk into the freezer (but in a plastic bag, also). No kidding. I advised someone to do this before (this person works at UCLA, in fact), and believe it or not, after a while in the freezer, the purportedly "dead" drive purred back to life. The user was able to boot from it and recover all data. So far as I know the drive still hasn't truly died yet. (if you don't believe me, check PC world's site).
Note: Unfortunately, it doesn't sound like the problem with this drive is physical, and freezing the drive only fixes physical glitches. Still, if all else fails, its worth a shot.
Note #2: also try the drive in other computers. Yours may just not like it.