Dell Backup and Recovery process doesn't see new HDD size correctly??

I had a HDD failure so I purchased a new WD HDD and installed in my 2330 AIO system. I had already made the recovery discs so I started by booting to the CD and the process began but during the recovery process I had a loss of power, so I started the process over but know the recovery process says the HDD is not the right size that I need one that is at least  GB??? It doesn't tell me the size but the drive is brand new and is the same size as the one that was removed, 1TB. 

I think something happened to the disk during the recovery process when the power was lost. How can I get around this error to continue with loading from the recovery discs I created? When I do F12 and look at the BIOS it tells me that the WD disk is 1000GB, so it sees the correct size?

Should I try to reformat the new drive or something? I'm at a loss now. The computer was running Windows 8.1.