I had a friend's dad's computer's HDD fail while I was installing Linux on it to show him it. That was terrifying. I still remember the error, and I just left with it (and Windows) unable to boot. Later my friend told me that the drive was toast.
Come to think of it, maybe it was me. I might have trashed the MBR? I remember the error, though, "Non system disk or disk error".
Yeah, sounds like the drive was still physically detected but that the expected boot loader wasn't present any more.
IIRC, that error text comes from the mbr. You may have trashed the partition table?