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Refurbished e6420 not installing OS

I have a refurbished e6420 that will not install the win7 OS. When I start it up without the boot disc, after the Dell splash screen it asks me to launch startup repair. When I select that, it shows "loading windows files", and after it completes that, goes to another screen with a small loading bar and Microsoft Corporation underneath. It appears to get stuck here. It does not detect the factory-furnished CD in the disc drive, so I tried to boot from a USB loaded with win7. Result: shows "loading windows files" and then freezes on windows splash screen (left it for a couple of hours just in case). It has not successfully booted since its purchase, and I am trying to fix it as opposed to selling it for parts. Any thoughts on how to fix this?

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RE: Refurbished e6420 not installing OS

Run an extended diagnostic on the system - in particular on the hard drive.  F12 at powerup.

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