Setup could not find hard disk

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Perhaps you have tried this already as I didn't read through all the replies to see. This error will occur if you do not have the raid drivers installed.


It wouldn't cause this issue, as I am not running raid setup (despite the fact that my system's board support it) nor I have installed any drivers, hence the assumption IMHO is wrong.

It all boils down to the way system is configured to run in BIOS, now if the OP was installing newer OS i.e. Vista or Win7, he would have sailed through installation without any issue with native SATA settings (e.g. AHCI) in the BIOS, however, it is bit odd to note that there is no 'IDE emulation' or similar settings available in that board's bios.
 
It wouldn't cause this issue, as I am not running raid setup (despite the fact that my system's board support it) nor I have installed any drivers, hence the assumption IMHO is wrong.

This may not be what is causing the issue for you but, not installing the raid drivers can without a doubt, cause the error message received. I have seen this too many times.
 
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