Got a bootable CD working. And the hard disk appears to be fine. Also downloaded some expireware from MS that I gather is intended for such things ([link|http://www.microsoft.com/downloads/details.aspx?FamilyID=5D600369-0554-4595-8AB4-C34B2860E087&displaylang=en|Microsoft Diagnostic and Recovery Toolset]. All diagnostics on the disk and OS show no problems.
I was thinking that it might be that the MBR was hosed. Ran MbrFix but that didn't help. Then went ahead and ran BootItNG, which also runs fine. Next course of action is to find a copy of XP and reinstall the OS. Now if we can just locate the original upgrade CD's.
Anyhow, thanks for the pointers.