But I thought you said you restored files that were after the issue ? If so, and a manual restore could fix it I would assume those files are corrupted too ?
http://community.spiceworks.com/how_to/show/214-perform-a-system-restore-manually-when-windows-is-not-bootable

…Agreed…so if this is a O/S corruption issue why play with physical partitions just yet ?
I would sure try…

  1. System File Check SFC /scannow …this can repair O/S issue.
    http://pcsupport.about.com/od/toolsofthetrade/ht/sfc-scannow.htm
  2. A “Repair” install…this is NOT, I repeat not, a format HDD with clean install of Windows.
    http://www.michaelstevenstech.com/XPrepairinstall.htm

…lastly reading thru the thread it sounded like chkdsk or some other function was thrashing the HDD…however, you don’t know what it was. Thus, if you can get to the command prompt perhaps try chkdsk c: /f and see if it fixes…you can always run without the /f to see the issues first. Be sure to run in the root directory.