Did my brand new hard drive die or ???

Okay... so I bought a new hard drive for my Dell Desktop 430 after the old one died.
I got it up and running and installed Windows Vista Home Premium 64 bit again from the Dell re-installation disc. Yay!
(However in order to get it to install Windows Vista, I had to make a change in setup. It wouldn't install so I had read somewhere that changing to Autodetect RAID (or something like that) would help. I did, and it worked.

Then I created a partition using the excellent guide created by Brink at this forum! All good so far!

Then I grabbed a backup image of my old drive made by Paragon backup, and transferred it from my external backup drive to my partitioned drive R.
I then used the Paragon backup program to try to install the Partition over the C drive, loading it from the R drive.

It started doing its thing and seemed to be running just fine. I think there were 4 steps for it to go through to install the Image and it was on step 2 when I left home to go out for awhile.

When I came back home a couple hours later I found the blue screen of death and a message that said something like "No drive is detected to boot from".

I restarted and it just want back to the same screen. I restarted again and the same thing.

My question is, What happened?
Did the Paragon Personal Backup program kill my drive somehow? I find that hard to understand/ believe.
Or did the drive just die "out of the blue" because it is a lemon? That is my working theory.

How can I proceed from here? Is my drive really dead or is it just "playing opossum"? ;-D
Why did it apparently die while loading a disc image using paragon backup software?
What do I do now?