Running the test, it seems to stay on the PCI IDE Controller 0 - Master... during the detect devices portion of the test.
1. Is the hard drive connected via an IDE interface? Since the symptoms are so strange, you might want to double check your configuration. See:
Connecting IDE Hard Drives.
a. 80 wire vs 40 wire cable
b. Correct jumper setting (master, single, cable select, slave)
c. Position on cable
2. It seems odd that the BIOS would see it, but the Hitachi Drive Fitness Test would not (but then again I've only run the test a couple of times on working drives).
Would you mind telling us how the BIOS reports the drive?
a. IDE Primary Master (PM), Primary Slave (PS), Secondary Master (SM), Secondary Slave (SS), or something else?
b. Identification string reported (basically make/model number) and is it correct?
c. Total Capacity reported and is it correct?
If the motherboard/BIOS also supports SATA drives, is there a BIOS parameter to distinguish between IDE only, SATA only, mixed mode. The parameter might present settings similar to: Legacy, IDE, IDE Compatible, SATA, AHCI.
3. Just an Observation. When the system blue screens on a hard drive boot, you know:
a. It found the boot hard drive.
b. It found, loaded, and executed the master boot record code.
c. It found an "active" primary partition.
d. It found, loaded, and executed the partition boot record (of the active primary partition which in this case identified NTLDR as the boot loader program).
e. It found, loaded, and began executing the NTLDR program from the system partition of the hard drive (which also puts up Windows Advanced Options menu upon request).
f. It probably found, loaded, and began executing NTDetect.com...
The point being, the hard drive had some working functionality (which is why I'm puzzled Drive Fitness Test didn't detect it).
4. Just Because. While it probably won't solve your problem; I'd download the iso image for a "free" memory diagnostic, write the iso image to CD (not copy), boot the CD and let the memory diagnostics run thru a couple of complete passes. Yeah, I know we're looking at the hard drive subsystems, but it wouldn't hurt to find out what still works. If successful, the test will demonstrate the memory is OK, some basic CPU and motherboard functions work, you can successfully read/load from CD, and system can run for extended period of time without crashing (power, heat, whatever). See:
http://www.memtest86.com/ or
http://www.memtest.org/.