Well your in a loop, which does mean you have a problem, right this really is going to be trial and erro. Take out the CD and Drive put in another drive and see what happens.
Put in another drive see what happens, if new drive works then yo have a drive problem of some sort.
Try putting you the offending drive into the secondary slot (I'm assuming you have IDE here)
It sounds like you have changed the boot order but make sure the hard drive is first in the list, if not then see if you can boot from a floppy. After you've done all that get back to me..