Acronis Disk Director unable to recover my disk?

I have a Compaq laptop with a 40 Gb HD. Several years ago I partitioned it into c, d and e, using Partition Magic. As c and e were running out of space, I decided to move some space from d. I ran CHKDSK in all 3, and no errors were found. I then ran PM and moved space from d into c. Everything worked fine. I then ran PM again to move space from d into e. It worked for about one hour, and when it was 98% complete, PM gave me an error message saying that one of the disks (didn't say which) had a bad sector, it aborted, and asked for a reboot. When I rebooted, I got a blue screen when Windows started to load. I ran the disk check utility of the BIOS, and it failed. I tried to boot in safe mode, recover the last good known configuration, didn't work either. I then booted from the XP CD, and selected the Recovery Console, but it aborted saying the wrong drive was specified. It did not recognize the c drive.
I then used Acronis Bootable Recue Media Builder to create a bootable CD and tried both ADD Full Version and Safe Version. I got an error message saying that it failed to read from sector 40,869,360 on HD 1. I selected retry, ignore, ignore all, but no matter what option, I got the same results: ADD goes to the Analyzing Partition screen and does not progress. It seems to be in a loop trying to read the HD, or frozen.
By the way, I am running XP2 and ADD 10.0 (build 2,160).
Any suggestions?
Thanks

 

mmn,

Can you boot to the Partition Magic floppy or CD and see your HD?
Can you run ptedit and see the partition table from these discs?
Can you see your HD using a BartPE CD?
What backups do you have?