Low Level Disk Format

It's unlikely that the sector formatting has actually been lost.  For the last ten years it has been necessary to use special applications to write the low level sector data on a drive, and it is usually considered best if you use the application that the manufacturer uses to do it.  Vendors such as Seagate and Western Digital once made the low level format application available on their web pages, but they are so seldom used you might not be able to find them anymore.

The more likely problem is that the disk wipe application has modified the first sectors of the drive in a way that Windows setup thinks that the disk is in use by an operating system it doesn't recognize.  Does setup recognize that the disk drive is present?  If so, you might be able to go through custom install and use the utility to create and delete partitions to make a recognizable partition.  Failing that, If you use a bootable Linux CD and use FDISK to make a standard partition on the drive, and then remove it, you might have better luck with the Windows installation disk.

Is there a self booting program that can be loaded on a CD or stick that will do a low level disk format of C: or should I just give up trying?

You did try creating a partition?

"Does setup recognize that the disk drive is present?"  I fear not.  I have a 2-disk SCSI RAID Array that the Win 7 setup does see, but not the C: drive.  I tried the custom install; the C: disk just doesn't show. 

"Failing that, ..."  sounds like a good idea.  Of course one option is just to build the machine with Linux, but learning a new OS is a bit of a hurdle.

Thank you!