Windows Vista Dell Inspiron 531s "windows failed to start"

I have a Dell Inspiron 531s that is 2 years old but has never been used. When I turned the computer on, I received the message "windows failed to start" due to software/hardware changes. As this computer has never even been used, there have been no hardware or software changes. I cannot get into safe mode by pressing F8. I was sent to the system repair options screen but could go no further because I don't have the administrator password. The person who had the computer doesn't even remember creating a password. I have the cd's and have tried to reinstall windows but after putting the cd in the drive and telling the computer to boot from the cd, the computer just goes to a black screen with the cursor blinking in the top left hand corner. I have posted this issue on 3 other websites (including Dell) and no one seems to know what is going on or how to fix it. Could there just be a hard drive issue?