you need to start from a known place..
so, if it were me, and i did a lot of this on T40 series, i would start with a known good, clean HDD.. (usually a new HDD)..
then set, as you did, i think, the boot order in biois, thus:
floppy, CD, HDD in that order..
and make the USB bootable..
THEN insert either an IBM recovery CD or one created from the original recovery partition, and boot from that..
or, in the alternative, boot from a windows CD with winXP, Vista or Win 7..
then proceed from there with installing the OS, updating all the drivers once you have an internet connection..
from reading your first post its unclear what type of HDD you got from ebay..
OH, i would FOR SURE install a good AV..
i use ESET ESS.. VERY good and gives one a lot of control including a setting to control when some apps send out without user knowledge or control..
and i would also not have too many (or any) partitions unless there is a compelling reason to do so..
Bill Morrow, kept by parrots & cockatoos
Sysop - forum.thinkpads.com
She was not what you would call refined,
She was not what you would call unrefined,
She was the type of person who kept a parrot.