I have a Satellite Pro S500-10E that came with Windows 7 Pro with downgrade rights (and DVD) to XP Pro. I downgraded to XP Pro and everything worked fine (I did this on a number of similar machines).
Then Windows started having problems and crashing with BSOD.I decided to rebuild machine by reinstalling Windows XP Pro from DVD that came with machine.The thing is it gets to 2% and then gives BSOD.
I thought it was hard disk as there were disk errors when removed it and put it externally on other machine, so replaced it. Still same problem. I tried to connect external USB DVD drive and boot from that. It did indeed boot from external drive but then for some reason tried to copy files from it's own DVD drive.I have tried to reinstall Windows 7 Pro from the DVD back up set I created, this failed. I tried to install Windows XP Pro from box version and that failed.
At this stage not sure if DVD drive or what. Tried to build boot up flash drive, but even though the system saw it as option for booting, it then tried to boot off network ?
To be honest I don’t think there is much what you can do. You have tested both recovery disk and a new HDD but the same happens. So this would mean it’s hardware related problem.
Toshiba recovery disk contains a pretested image of all drivers and tools. That means you can always install Windows from recovery disk and it will work. If not (as in your case) it something wrong with hardware.
If your notebook is still under valid warranty you can bring it to an authorized service provider in your country and the guys can fix this for free due to warranty. Get in contact with the technicians and explain your problem, they will sort it out for you.