While waiting for my appointment, I tried reinstalling Mountain Lion. It got to the same point as the Lion install and halted with a dialog box saying there was a disk error that couldn't be fixed. For the hell of it, I restarted and it went to completion. I restarted again and the OS came up.
Then I took it took the Apple store. They had issues with the hard drive and wanted $200 for a new one. I passed. Two different employees in two different stores said there was no problem giving away the Mac Mini with OS upgrade I bought through the App Store. My reading of the software agreement indicates otherwise.
When I got home, it still booted to Mountain Lion so I'm going to leave it on since I'm giving it to my nephew. He's kind of trustworthy
I also ran the disk utility and it didn't find any errors.