this is actually not a hardware problem, i experienced the same on 5.5, here is a fix,
use dos tool fdiskon a bootable floppy, first view partition data, then remove all partitions.
reboot
use fdisk again to form a new pri_dos partition
reboot
format partition /s
reboot
( from compu hd )
see if it passes, it should pass now to dos.
install sme again.
has something to do with not writing the first bites in sector 0 of the hd.
Dunno how this happened but it occurs also if you try to use your hd used for sme for a normal dos os again by deleting the partitions. the header gets screwed up for some reason and won't be fixed unless you reboot between all actions.