what you need to do is a low level format first, using fdisk. After that is accomplished you will be able to format the drive and install the new OS.
At least that is how I got around the problem.
Setting up a primary partition. You first must set up your Primary DOS Partition. To do this, type fdisk at the DOS prompt and press ENTER. You then will see a menu with a heading that includes the DOS version number you are working with, the title “Fixed Disk Setup Program,” copyright information, and this FDISK Options menu:
Current fixed disk drive: 1
Choose one of the following:
1. Create DOS partition or Logical DOS Drive
2. Set active partition
3. Delete partition or Logical DOS Drive
4. Display partition information
Enter Choice: [1]
Press Esc to exit FDISK.
Enter choice 3.
After it deletes the active partition, you need to create a new one. So your next choice is to enter 1.
This leaves you with a choice, is your partition going to be the entire drive, or are you going to break it down to smaller partitions. If you desire to run dual OS's I would set up 2 active partitions. You can have up to four active partitions. An active partition is one that is able to boot the system up.
An extended partition can not be used to boot system up. This means that it would be perfect for application software. Since an extended partition allows the creation of "logical" drives you can place a maximum amount of logical drives on the system of (D-Z) with C being the designated active partition.
Another method would be to run
fdisk /mbr
this command recreates the master boot record.