The fact that you can boot the Linux CD shows that your CPU, graphics, RAM and optical drive are all OK, so the most likely problem (suggested by your posted error code) is a broken HDD.
If when you boot the CD (using the first "run without changing your PC" option, not the Install option), you're absolutely sure that there's nothing left on your HDD (make sure you can see that it's empty, not just that you haven't worked out how to display its contents), then use the system/partition manager option to do a full format of the HDD (not quick format). It will take hours to complete but it might salvage a working HDD. If it completes successfully, try doing your "factory reset" again with the recovery disk(s).