It may be that the MBR has been altered and thus rendering the factory restore option dead. You only choice at this time would be a clean install. Why the previous user downgraded from pro to home is a good question and most likely the cause.

After the Dell splash screen you should see a blue bar at top of screen. If you do, it is a good sign

that the DSR partition is still working. If you don't see it, it might be removed and you can't do

a restore.

Pressing the     Control Key and F11     needs to be done during the time the blue bar is on the screen

which is about 2 seconds. If you miss, just try again.

You can also click   start,   control panel,   Administrative Tools,   Computer Management,

                                Disk Management.

Check your    Disk 0  for three partitions.

First one should be about    47 MB FAT    the second one a large NTFS partition with a drive letter of C

and the third partition about   5GB FAT32 which is the restore partition.

Hope this info helps you. 

Tom,

I do have 3 partitions as you stated the third is 3.49GB FAT32 healthy unknown partition. Is that what I need to be able to restore the factory image? If so, what steps do I need to follow?

I would make a backup or image of that 3.49GB FAT32 partition first.

It should have a directory called "img" that contains a set of files

( fi.gho and fi000001.gho ) which is the image files using symantec ghost 8.2

Go to this site and read about the DSR partition.

http://www.goodells.net/dellrestore/fixes.htm

After you read and understand this site you should be able to boot into DOS

and run dsrfix to fix the problem then use your Ctrl + F11 to restore the drive.

If you need more help, let me know.