Sounds like a hardware problem to me too.
Remove all the cards except the video card.
How big is the hard drive?
How much memory and how many sticks?
The easiest (and fastest) was to format a drive is to use a CD from the HD manufacturer. You can usually download ISO disc images from their website. For Maxtor drives, it's called MaxBlast. Western Digital is called "Lifeguard Tools" or something like that. The other manufacturers have similar discs.
Oh, and as an aside...
If you feel adventurous, you can slipstream Win2K SP4 into a copy of your Win2K disc and burn it. In fact, there's a group that has made what's called the "Unofficial Windows 2000 Service Pack 5.1". This includes all the service packs up to and including SP4 as well as the Update Roll up and a ton of other microsoft patches...
http://www.war59312.com/win2ksp5.phpThe slipstreaming process is pretty easy if you use nLite...
http://www.nliteos.com/The benefit to doing all of this is that once you're finished your install, there's only a few windows updates to do instead of a hundred.
Oh, and while you're in there hacking, you can also modify the installer so it doesn't ask for the serial number. I think it fools the installer into thinking you have a corporate copy or something...
http://www.thetechguide.com/articles/win2kserial.htmlNote that all that I describe above requires that you have an actual Win2K CD. Just so nobody thinks I'm advocating software piracy or anything.