The problem can be narrowed down to the BIOS. Since Windows setup disc refused to boot up, means the BIOS did not complete its initialisation and passed on to the Boot program. If your hard disk was faulty, Windows setup would say something about unable to detect HDD.
What you can do is try reset BIOS to default settings. if this doesn't work, the chance the BIOS is faulty is very high. To determine if it's BIOS hardware or software, you can try flashing the firmware to the current version or later (assuming this BIOS function still works). if after flashing the BIOS refuses to boot to CD or HDD, then it looks like your BIOS hardware might be the problem. If it is, its time to put it down