I made a BartPE Boot CD (Great Tool! - thanks for that tip), used it to search my system for the Restore Point (RP_) folders/files without success. I'm sure I wiped them with cleanup tools when I was getting started with all this. Anyhow, the BartPE CD allowed me to network the system to my main system so that I could copy all the data across the network to a spare drive. It also found some master file table errors while running checkdisk on the drive and fixed them, but that still did not solve my looping problems. I repeated all the steps, booting to the CD, going through the setup process, choosing the 2nd R option, failing, re-trying with the first R option and then using bootcfg /rebuild and the "Failed to successfully scan disks for Windows installations" errors continue to show up. Tried creating and using boot floppies, copying the NT Boot files over to the damaged C: drive. Then going through the steps above again without success. Since I was able to copy the critical data files across, I'm finally giving up and will wipe the system and see if I can't get a good clean XP install. It will be a hassle since I'll have to reload everything, Office, Quickbooks, Antivirus/Antimalware, etc. but it's already taken far too long and I can't seem to progress pass the "Setup is being restarted........" or "Setup can not run under Safemode, Setup will restart now." error messages. It's been brutal to say the least! I do appreciate all the help and suggestions. I'll follow up with how the clean install went.
Edited by Frank T, 08 May 2010 - 10:26 PM.