Installing Windows 2008 R2 Server halts at grey screen

Two weeks ago when I rebooted our Win2008 R2 Server (64-bit) it started to power up and load Windows (Windows 2008 Server) but would then suddenly turn-off and start powering up again (and then just keep suddenly turning off, restart, repeat).

I tried booting into safe mode and last known configuration - no joy. It was falling over on classpnp.sys. So I thought I might have corruption on the disk and tried to repair the server from the CD and then I was able to restore the O/S from a backup. I thought that was the end of it but then the next time the server rebooted I had the same problem. Then trying to repair from CD did not work.

I tried repartitioning the disk and installing Windows 7 instead but the installation did not even complete before the PC was powering off mid-boot. I contacted the hardware supplier and they thought it might be the RAM so they've sent me 3 replacement DIMMs, I've swapped those out and the PC isn't powering off anymore but...

The server was trying to boot from the incomplete Windows 7 install. I took the disk out and deleted the 2 volumes on that disk and now trying to install Win2008 from CD. I get the black screen:

Windows is Loading files ...

that completes, and then the grey screen appears with a cursor, but no window/dialog (I'm expecting it to prompt me what language and keyboard I want to use). The server just sits there. alt+tab, ctrl-alt-del, etc. don't have any effect.

If I try booting with no CD I get

BOOTMGR is missing

How do I get past that grey screen? Or is this a hardware failure?

From serverfault Dan

• Hi!

  Sounds like you have a hard drive failing or some other kind of hardware. Can you swap drives and test again?

  Dan : Eventually... I just left the server powered on for 15-20 minutes and when I came back found the setup screen was finally there. So I completed the install then checked the disk, didn't find any problems. It seems to be running fine now (it's a dev/test server and not been heavily used yet). When I was trying to install I must have been waiting 1 or 2 minutes at least before I was resorting to the power button thinking something was wrong, although I'm a bit worried there might still be because that didn't seem right. Booting the server now is very quick/responsive though.
  From JPerkSter