From experience if the HD is cooked or corrupted beyond saving (as yours seems to have been) I would certainly suspect that the processor is also cooked and the memory is the same.
Perhaps someone will correct me but dont DOS programs, commands run in low (or is it High) memory, and is it possible that the memory is ok to let DOS run but windows using all memory is failing?
Maybe this is rubbish but just a thought that went through my head.