I am on a MacBook Air, A1370 Mid 2011. I bought it as a back up for my Macbook Air A1370, because I need to stay with Snow Leopard (for a lot of reasons), if anything happened to my computer, even with a back up clone of the drive, Time Machine, it would not run on a newer logic board. So I bought the same year and model as mine.
The "new" one was loaded with El Capitain and I have been trying to wipe it and load my clone of my hard drive- but El Capitain is not letting me. Same as OP.
I have an external DVD drive, EC wont load the installer, it wont even see the drive when I hold down option and try to select a startup disk.
It wont let me erase or format.
So I used the back up of the EC drive (yes, I backed up first on a USB drive), it would allow it to be the startup disk, and from the backup USB drive of EC I was able to "erase" the El Capitain hard drive.
But then when I tried to reboot and use the Snow Leopard DVD, or even the El Capitain USB drive, hold down option, it shows NO startup disk, I can only use "Internet Recovery".
I had also tried holding down C at the start of this, trying to get it to install from the Snow Leopard dvd. Holding down C then and now only brings me to an Apple logo.
If its an A1370 logic board, it has to have shipped capable of running Snow Leopard, right? Does El Capitain change the firmware on the logic board? I will try resetting the PRAM...