It is most likely an issue with the hard drive or at least that is the easiest and cheapest thing to test first. I would say connect it to another PC either directly or via a USB adapter and run a utility like check disk and then try it again.

Also make sure you don't have any thing connected to the computer you don't need: disconnect printers, cameras, thumb drives, remove TV cards etc. That extra stuff can only cause problems during an install. You just want the monitor keyboard and mouse and that's it in other words.