Problem with internal hard drive

Sounds more like a Logic Board issue...If your HDD was dead, the optical should still read. You could try an SMC re-set:

http://support.apple.com/kb/HT3964?viewlocale=en_US&locale=en_US


Then try running the AHT tests on the disks....But if you can't get at the data on the optical, you may have to get Apple to take a look.

 

It's likely not dead. You have corrupted data in a critical area so it won't boot, would be my best guess. That you can see it means that it will mount, at least, which is a good sign.

To get the data off, DO NOT run any tools on the drive. The best (quickest and easiest) way I have found to get data off of a boot drive on a Mac is to connect it to another Mac in firewire target mode. The drive in question will then look just like an external drive to the other Mac. And this is why I lament the death of firewire on newer Macs.

If that does not work, there is always the Genius Bar.

You can also get software that will recover the data, but I've been down that road, and it is a rocky one for HFS+. I stupidly deleted part of my iTunes media library once without backing it up first. I spent $100 on software, which worked just fine and found and moved all of the files back to another drive. The problem was that all of the metadata that represents the name of each file was lost and converted to an arbitrary file name which might as well have been gibberish. That left me with an option of listening to and manually renaming 2000 files one by one. I tried to see if Grace Note would rename them, but no dice.

The critical difference here is that YOU DID NOT DELETE THE FILES, and I did, and it was probably the deleting of the files that torpedoed the metadata and file names, meaning that your files are probably still intact.

It usually takes one incident like this to convert a user to one that backs up religiously. Time Machine is your friend. I am not a fan of TM because of its one-size-fits-all parameters that can quickly fill up even a large HDD, but I use it because I found a free utility called Time Machine Editor on the web that greatly expands the user options.