Before you give up on your drive, have a look at SpinRite, at
http://www.grc.com I used to have to use this regularly back in the days when drives weren't nearly as reliable as they are now, and it saved me from a lot of problems.
For those who aren't familiar with it, SpinRite will scan your hard drive for errors and correct them, saving the data in another location if necessary. It used to be able to do a low level format, with all data left in place and unharmed. I'm sure it will still do this if necessary. It's a little pricey ($90), and doesn't have a free trail period any more, but worth it if you need to save valuable data.
Hook