Mountain Lion Installation Issues

So, I just downloaded the new OS X from the app store (mountain lion) And i went to install it and about half way through the installation it told me that my hard drive had some issues and that it needed repaired. so it brought me to a screen with a language option, then it gave me some options. to either restore the time machine backup, which id like todo but i haven't backed anything up since february, the second was to reinstall os x which really isn't an option because the hard drive has some issuer, then there's a get help online option which really doesn't help and then disk utility. Under disk utility there is an option to repair the disk, so i did that but then it stopped half way through that and it asked me to erase my drive in order to correct the problem. I could do this but i need to back up my files first. How to I eject the "imaginary disk" of OS X mountain lion to just get back to the normal lion operating system that I'm currently using? I've tried a bunch of stuff like holding X upon rebooting, Ive Reset the PRAM, (I'm not sure how that helped) and thats about all. I Need some help here if anyone knows what to do, please let me know!! Thanks