Hi,
It's starting to look like a harware problem, but it may be worth trying the following.
Using the tool on the following link, create a bootable USB flash drive from the Windows 7 image you downloaded earlier.
http://images2.store.microsoft.com/prod/clustera/framework/w7udt/1.0/en-us/Windows7-USB-DVD-tool.exe
A further description can found Here.
When created, try installing from this media.
DP-K